Texas 2009 - 81st Regular

Texas Senate Bill SB1084 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R4137 YDB-F
2	2	By: Ellis, Carona S.B. No. 1084
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the authorization and regulation of casino and slot
8	8	gaming in this state, the creation, powers, and duties of the Texas
9	9	Gaming Commission, and the powers and duties of the Texas Racing
10	10	Commission; providing penalties.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Title 13, Occupations Code, is amended by adding
13	13	Subtitle A-1 to read as follows:
14	14	SUBTITLE A-1. CASINO, SLOT, AND OTHER GAMING REGULATED BY TEXAS
15	15	GAMING COMMISSION
16	16	CHAPTER 2021. GENERAL PROVISIONS; TEXAS GAMING COMMISSION
17	17	SUBCHAPTER A. GENERAL PROVISIONS
18	18	Sec. 2021.001. DEFINITIONS. In this subtitle:
19	19	(1) "Affiliate" means a person who, directly or
20	20	indirectly through one or more intermediaries, controls, is
21	21	controlled by, or is under common control with another person. A
22	22	person is considered to control a company if the person
23	23	beneficially owns more than a five percent equity interest in the
24	24	company under the beneficial ownership rules adopted by the
25	25	commission.
26	26	(2) "Applicant" means a person who has applied for a
27	27	casino owner's license, a casino operator's license, a slot
28	28	establishment owner's license, a slot establishment operator's
29	29	license, an occupational license, a manufacturer's license, a slot
30	30	machine provider license, a casino service license, or a
31	31	qualification to hold an equity interest or creditor interest in a
32	32	casino owner's license holder or slot establishment owner's license
33	33	holder or who has applied for the approval of any act or transaction
34	34	for which approval is required or allowed under this subtitle.
35	35	(3) "Associated equipment" means any equipment,
36	36	including a mechanical, electromechanical, or electronic
37	37	contrivance, component, or machine, used in connection with gaming
38	38	or with any game that would not otherwise be classified as a gaming
39	39	device. The term includes dice, playing cards, links connecting
40	40	progressive slot machines, equipment affecting the proper
41	41	reporting of gross gaming revenue, computerized systems or software
42	42	for monitoring slot machines, and devices for weighing or counting
43	43	money.
44	44	(4) "Casino" means a facility at which gambling games
45	45	are conducted for profit that are not authorized by a law other than
46	46	Chapter 2022. The term does not include a slot establishment.
47	47	(5) "Casino operator" means a person other than the
48	48	casino owner's license holder who contractually agrees to provide
49	49	operational and managerial services for the operation of a casino
50	50	on behalf of the casino owner's license holder in return for
51	51	receiving a payment based wholly or partly on profits or receipts
52	52	from the casino.
53	53	(6) "Casino operator's license" means a license issued
54	54	under Section 2022.101.
55	55	(7) "Casino owner's license" means a license issued
56	56	under Section 2022.052.
57	57	(8) "Casino service" means the provision of goods or
58	58	services, including security service and gaming schools, to a
59	59	person holding a casino owner's or operator's license under this
60	60	subtitle, other than a service requiring a manufacturer's license.
61	61	(9) "Casino service license" means a license issued
62	62	under Section 2022.152.
63	63	(10) "Casino service license holder" means a person
64	64	who holds a casino service license.
65	65	(11) "Commission" means the Texas Gaming Commission.
66	66	(12) "Commission member" means a member of the
67	67	commission.
68	68	(13) "Company" means a corporation, partnership,
69	69	limited partnership, trust, association, joint stock company,
70	70	joint venture, limited liability company, or other form of business
71	71	organization. The term does not include a sole proprietorship or
72	72	natural person.
73	73	(14) "Creditor interest" means a right or claim of any
74	74	character against a person for the payment of money borrowed,
75	75	whether secured or unsecured, matured or unmatured, liquidated or
76	76	absolute, or fixed or contingent. The term includes an obligation
77	77	based on the person's profits or receipts.
78	78	(15) "Director" means a member of the board of
79	79	directors of a corporation and a person performing similar
80	80	functions with respect to a company other than a corporation.
81	81	(16) "Equity interest" means a proprietary interest,
82	82	right, or claim allowing the holder either to vote with respect to
83	83	matters of organizational governance or to participate in the
84	84	profits and residual assets of a company, including common and
85	85	preferred stock in a corporation, a general or limited partnership
86	86	interest in a partnership, a similar interest in any other form of
87	87	business organization, and a warrant, right, or similar interest
88	88	convertible into, or to subscribe for, a proprietary right or
89	89	claim, with or without the payment of additional consideration.
90	90	(17) "Executive director" means the executive
91	91	director of the commission.
92	92	(18) "Game" or "gambling game":
93	93	(A) means any game or similar activity that
94	94	involves the making of a bet, as defined by Section 47.01, Penal
95	95	Code, for consideration, and includes:
96	96	(i) a banking or percentage game played
97	97	with cards, dice, or a mechanical, electromechanical, or electronic
98	98	device or machine for money, property, checks, credit, or a
99	99	representative of value, including roulette, keno, twenty-one,
100	100	blackjack, craps, poker, chuck-a-luck (dai shu), wheel of fortune,
101	101	chemin de fer, baccarat, pai gow, slot machine, any other
102	102	electronic game of chance, and any other game or device approved by
103	103	the commission;
104	104	(ii) simulcast wagering on pari-mutuel
105	105	greyhound or horse racing;
106	106	(iii) the maintenance of a race book; and
107	107	(iv) any other method of effecting a wager
108	108	approved by the commission; and
109	109	(B) does not include:
110	110	(i) bingo authorized by Chapter 2001;
111	111	(ii) charitable raffles authorized by
112	112	Chapter 2002; or
113	113	(iii) the state lottery conducted under
114	114	Chapter 466, Government Code.
115	115	(19) "Gaming" or "gambling" means to deal, operate,
116	116	carry on, conduct, maintain, or expose for play a game in a casino
117	117	or slot establishment.
118	118	(20) "Gaming agreement" means an agreement authorized
119	119	under Chapter 2022 or 2023 between this state and a federally
120	120	recognized Indian tribe with Indian lands in this state under which
121	121	this state allows the tribe to conduct limited gaming activities
122	122	authorized under Chapter 2022 or 2023 or applicable federal law.
123	123	(21) "Gaming device" means a mechanical,
124	124	electromechanical, or electronic contrivance, component, or
125	125	machine used in connection with gaming or a game that affects the
126	126	result of a wager by determining win or loss. The term includes a
127	127	system for processing information that can alter the normal
128	128	criteria of random selection, affect the operation of a game, or
129	129	determine the outcome of a game.
130	130	(22) "Gaming employee":
131	131	(A) means an individual directly involved in the
132	132	operation or conduct of gaming in a casino or slot establishment
133	133	performing a service in a capacity that the commission finds
134	134	appropriate for occupational licensing under Section 2022.102 and
135	135	includes:
136	136	(i) a boxman, a cashier, change personnel,
137	137	counting room personnel, a dealer, a floor person, a host empowered
138	138	to extend credit or complimentary services, a keno runner, a keno
139	139	writer, a machine mechanic, or security personnel;
140	140	(ii) a shift or pit boss or a supervisor or
141	141	manager involved in gaming activities;
142	142	(iii) accounting or internal auditing
143	143	personnel directly involved in recordkeeping or the examination of
144	144	records generated from gaming activities; and
145	145	(iv) a junketeer or other independent agent
146	146	whose compensation is based on how much a patron wagers or loses or
147	147	who is paid per patron more than the price of admission; and
148	148	(B) does not include bartenders, cocktail
149	149	waitresses, or other individuals engaged exclusively in preparing
150	150	or serving food or beverages or individuals providing nominal,
151	151	complimentary, or maintenance services.
152	152	(23) "Gross gaming revenue":
153	153	(A) means the total of the following, less the
154	154	total of all cash paid out as losses to patrons and the amounts paid
155	155	to purchase annuities to fund losses paid to patrons by independent
156	156	financial institutions and items made deductible as losses under
157	157	Section 2022.303:
158	158	(i) money received by an owner's license
159	159	holder from players of casino games;
160	160	(ii) money received by an owner's license
161	161	holder in payment for credit extended by the owner's license holder
162	162	to a patron for the purposes of casino gaming; and
163	163	(iii) compensation received by an owner's
164	164	license holder for conducting any game in which the owner's license
165	165	holder is not a party to a wager; and
166	166	(B) does not include:
167	167	(i) counterfeit money or tokens;
168	168	(ii) coins of other countries that are
169	169	received in slot machines or gaming devices;
170	170	(iii) cash taken in fraudulent acts
171	171	perpetrated against an owner's license holder for which the holder
172	172	is not reimbursed; or
173	173	(iv) cash received as entry fees for
174	174	contests or tournaments in which the patrons compete for prizes.
175	175	(24) "Hearing examiner" means a person authorized by
176	176	the commission to conduct hearings.
177	177	(25) "Indian lands" means land that was held in trust
178	178	by the United States on January 1, 1998, for the benefit of the
179	179	Indian tribe pursuant to the Restoration Acts (Pub. L. No. 100-89)
180	180	or on which gaming is permitted under the Indian Gaming Regulatory
181	181	Act (18 U.S.C. Section 1166 et seq. and 25 U.S.C. Section 2701 et
182	182	seq.).
183	183	(26) "Institutional investor" means a person, other
184	184	than a state or federal pension plan, that meets the requirements of
185	185	a "qualified institutional buyer" as defined in 17 C.F.R. Section
186	186	230.144A and is:
187	187	(A) a bank as defined in Section 3(a)(6),
188	188	Securities Exchange Act of 1934 (15 U.S.C. Section 78c);
189	189	(B) an insurance company as defined in Section
190	190	2(a)(17), Investment Company Act of 1940 (15 U.S.C. Section 80a-2);
191	191	(C) an investment company registered under
192	192	Section 8, Investment Company Act of 1940 (15 U.S.C. Section
193	193	80a-8);
194	194	(D) an investment adviser registered under
195	195	Section 203, Investment Advisers Act of 1940 (15 U.S.C. Section
196	196	80b-3);
197	197	(E) a collective trust fund as defined by Section
198	198	3(c)(11), Investment Company Act of 1940 (15 U.S.C. Section 80a-3);
199	199	(F) an employee benefit plan or pension fund that
200	200	is subject to the Employee Retirement Income Security Act of 1974
201	201	(29 U.S.C. Section 1001 et seq.), excluding an employee benefit
202	202	plan or pension fund sponsored by a publicly traded corporation
203	203	registered with the commission;
204	204	(G) a state or federal government pension plan;
205	205	(H) a group composed entirely of persons
206	206	specified in Paragraphs (A)-(F); or
207	207	(I) such other persons as the commission may
208	208	determine for reasons consistent with the policies expressed in
209	209	Section 2022.001.
210	210	(27) "Key executive" means a corporation's directors
211	211	and executive officers, a partnership's general partners, a trust's
212	212	trustee, a joint venture's managing venturers, and each person
213	213	possessing similar responsibilities and authorities in any other
214	214	form of business organization.
215	215	(28) "License" means a license issued under this
216	216	subtitle, including a casino owner's license, a casino operator's
217	217	license, a slot establishment owner's license, a slot establishment
218	218	operator's license, an occupational license, a casino service
219	219	license, a manufacturer's license, a slot machine provider license,
220	220	or a qualification to hold an equity interest or creditor interest
221	221	in a casino owner's or slot establishment owner's license.
222	222	(29) "License holder" means a person holding a license
223	223	issued under this subtitle.
224	224	(30) "Manufacturer license holder" means the holder of
225	225	a manufacturer's license.
226	226	(31) "Manufacturer's license" means a license issued
227	227	under Section 2022.151.
228	228	(32) "Negotiable instrument" means a writing that
229	229	evidences a transaction between an individual and a casino or slot
230	230	establishment owner's license holder at the time of the transaction
231	231	whose gaming chips, tokens, or currency are exchanged for the
232	232	instrument and includes a writing taken in consolidation,
233	233	redemption, or payment of a prior instrument.
234	234	(33) "Net slot income" means the total amount of money
235	235	paid to play slot machines at a slot establishment less the value of
236	236	all credits redeemed for money, including any progressive prizes
237	237	and bonuses, by the players of the slot games. The following
238	238	provisions apply to the calculation of net slot income:
239	239	(A) the costs associated with progressive prizes
240	240	may not be deducted from the total amount of money paid to play the
241	241	games for purposes of determining net slot income; and
242	242	(B) promotional prizes offered by a slot
243	243	establishment may not be deducted or otherwise considered credits
244	244	redeemed for money by players.
245	245	(34) "Occupational license" means a license issued
246	246	under Section 2022.102.
247	247	(35) "Occupational license holder" means the holder of
248	248	an occupational license.
249	249	(36) "Operator's license" means a casino operator's
250	250	license issued under Section 2022.101 or a slot establishment
251	251	operator's license issued under Section 2022.202.
252	252	(37) "Operator license holder" means the holder of an
253	253	operator's license.
254	254	(38) "Owner's license" means a casino owner's license
255	255	issued under Section 2022.052 or a slot establishment owner's
256	256	license issued under Section 2022.202.
257	257	(39) "Owner's license holder" means a person holding
258	258	an owner's license.
259	259	(40) "Pari-mutuel license holder" means a person
260	260	licensed to conduct wagering on a greyhound race or a horse race
261	261	under the Texas Racing Act (Article 179e, Vernon's Texas Civil
262	262	Statutes).
263	263	(41) "Player" means a person who contributes any part
264	264	of the consideration to play a gambling game.
265	265	(42) "Principal manager" means a person who, as
266	266	determined under the rules of the commission, holds or exercises
267	267	managerial, supervisory, or policy-making authority over the
268	268	management or operation of a gaming activity or casino service that
269	269	in the judgment of the commission warrants the occupational
270	270	licensing as a principal manager for the protection of the public
271	271	interest. The term includes a key executive of a license holder
272	272	that is a company and each person controlling a license holder that
273	273	is a company.
274	274	(43) "Race book" means wagers accepted on the outcome
275	275	of an event held at a greyhound or horse racetrack that uses the
276	276	pari-mutuel system of wagering.
277	277	(44) "Racetrack" means a racetrack as defined by
278	278	Section 1.03, Texas Racing Act (Article 179e, Vernon's Texas Civil
279	279	Statutes), that is conducting live racing or simulcasting under an
280	280	active pari-mutuel license.
281	281	(45) "Slot establishment" means premises at which the
282	282	operation of slot machines is authorized by the commission under
283	283	this subtitle in accordance with a license or gaming agreement.
284	284	(46) "Slot establishment operator's license" means a
285	285	license issued under Section 2022.202.
286	286	(47) "Slot establishment operator's license holder"
287	287	means a person holding a slot establishment operator's license.
288	288	(48) "Slot establishment owner's license" means a
289	289	license issued under Section 2022.202.
290	290	(49) "Slot establishment owner's license holder" means
291	291	a person holding a slot establishment owner's license.
292	292	(50) "Slot machine" means a mechanical, electrical, or
293	293	other device or machine that, on insertion of a coin, token, or
294	294	similar object or on payment of consideration, is available to play
295	295	or operate, the play or operation of which, wholly or partly by the
296	296	element of chance, may deliver or entitle the person playing or
297	297	operating the machine to receive cash, premiums, merchandise,
298	298	tokens, or any other thing of value, whether the payoff is made
299	299	automatically from the machine or is made in another manner.
300	300	Sec. 2021.002. APPLICATION OF SUNSET ACT. (a) The Texas
301	301	Gaming Commission is subject to Chapter 325, Government Code (Texas
302	302	Sunset Act). Unless continued in existence as provided by that
303	303	chapter, the commission is abolished September 1, 2021.
304	304	(b) On the date the commission is abolished under Subsection
305	305	(a), the following statutes are repealed:
306	306	(1) this chapter;
307	307	(2) Chapter 2022;
308	308	(3) Chapter 2023; and
309	309	(4) the Texas Racing Act (Article 179e, Vernon's Texas
310	310	Civil Statutes).
311	311	Sec. 2021.003. REFERENCES TO LICENSE INCLUDE CERTIFICATE OF
312	312	REGISTRATION OR OTHER APPROVAL. Except as expressly provided by
313	313	this subtitle, other law, or commission rule, a reference in this
314	314	subtitle to a license applies to a certificate of registration,
315	315	finding of suitability, or other affirmative regulatory approval
316	316	under this subtitle, other law, or commission rule.
317	317	Sec. 2021.004. EXEMPTION FROM TAXATION. A political
318	318	subdivision of this state may not impose:
319	319	(1) a tax on the payment of a prize under Chapter 2023;
320	320	(2) a tax, fee, or other assessment on consideration
321	321	paid to play a gambling game authorized by this subtitle; or
322	322	(3) a tax or fee on attendance at or admission to a
323	323	casino or slot establishment authorized by this subtitle unless
324	324	specifically authorized by statute.
325	325	[Sections 2021.005-2021.050 reserved for expansion]
326	326	SUBCHAPTER B. TEXAS GAMING COMMISSION
327	327	Sec. 2021.051. COMMISSION; MEMBERSHIP. (a) The Texas
328	328	Gaming Commission is composed of five members appointed by the
329	329	governor with the advice and consent of the senate.
330	330	(b) Appointments to the commission shall be made without
331	331	regard to the race, color, disability, sex, religion, age, or
332	332	national origin of the appointee.
333	333	Sec. 2021.052. QUALIFICATIONS OF COMMISSION MEMBERS. (a)
334	334	To be eligible for appointment to the commission, a person:
335	335	(1) must be a citizen of the United States;
336	336	(2) must have resided in this state for the two years
337	337	preceding the date of the person's appointment;
338	338	(3) must submit a financial statement that contains
339	339	the information required by Chapter 572, Government Code;
340	340	(4) may not own a financial or other interest in a
341	341	person engaged in the conduct of gaming or the provision of casino
342	342	services, or in a security issued by that person, or be related
343	343	within the second degree by affinity or the third degree by
344	344	consanguinity, as determined under Chapter 573, Government Code, to
345	345	an individual who owns such a financial or other interest or
346	346	security;
347	347	(5) may not be an applicant for or holder of a license,
348	348	certificate of registration, finding of suitability, or other
349	349	affirmative regulatory approval under a law administered by the
350	350	commission or hold an equity interest or creditor interest in an
351	351	owner's license holder requiring qualification under Section
352	352	2022.060; and
353	353	(6) may not be a member of the governing body of a
354	354	political subdivision of this state.
355	355	(b) A person holding an elective office or an officer or
356	356	official of a political party is not eligible for appointment to the
357	357	commission.
358	358	Sec. 2021.053. MEMBERSHIP AND EMPLOYEE RESTRICTIONS. (a)
359	359	In this section, "Texas trade association" means a cooperative and
360	360	voluntarily joined association of business or professional
361	361	competitors in this state designed to assist its members and its
362	362	industry or profession in dealing with mutual business or
363	363	professional problems and in promoting their common interest.
364	364	(b) A person may not be a member of the commission or an
365	365	employee of the commission employed in a "bona fide executive,
366	366	administrative, or professional capacity," as that phrase is used
367	367	for purposes of establishing an exemption to the overtime
368	368	provisions of the federal Fair Labor Standards Act of 1938 (29
369	369	U.S.C. Section 201 et seq.) if:
370	370	(1) the person is an officer, employee, manager, or
371	371	paid consultant of a Texas trade association in the field of gaming;
372	372	or
373	373	(2) the person's spouse is an officer, manager, or paid
374	374	consultant of a Texas trade association in the field of gaming.
375	375	(c) A person may not be a member of the commission or act as
376	376	general counsel to the commission if the person is required to
377	377	register as a lobbyist under Chapter 305, Government Code, because
378	378	of the person's activities for compensation on behalf of a
379	379	profession related to the operation of the commission.
380	380	Sec. 2021.054. TERMS; VACANCIES. (a) Members of the
381	381	commission serve staggered six-year terms, with the term or terms
382	382	of one or two members expiring February 1 of each odd-numbered year.
383	383	(b) The governor shall fill a vacancy in a position on the
384	384	commission for the remainder of the unexpired term.
385	385	Sec. 2021.055. PRESIDING OFFICER. The governor shall
386	386	designate a member of the commission as presiding officer of the
387	387	commission to serve in that capacity at the pleasure of the
388	388	governor.
389	389	Sec. 2021.056. MEETINGS; OFFICIAL RECORD. (a) The
390	390	commission shall meet not less than six times each year.
391	391	(b) The commission may meet at other times at the call of the
392	392	presiding officer or as provided by commission rule.
393	393	(c) The commission shall keep an official record of all
394	394	commission meetings and proceedings.
395	395	Sec. 2021.057. GROUNDS FOR REMOVAL. (a) It is a ground for
396	396	removal from the commission that a member:
397	397	(1) does not have at the time of taking office the
398	398	qualifications required by Section 2021.052;
399	399	(2) does not maintain during service on the commission
400	400	the qualifications required by Section 2021.052;
401	401	(3) is ineligible for membership under Section
402	402	2021.053;
403	403	(4) cannot, because of illness or disability,
404	404	discharge the member's duties for a substantial part of the member's
405	405	term; or
406	406	(5) is absent from more than half of the regularly
407	407	scheduled commission meetings that the member is eligible to attend
408	408	during a calendar year without an excuse approved by a majority vote
409	409	of the commission.
410	410	(b) The validity of an action of the commission is not
411	411	affected by the fact that it is taken when a ground for removal of a
412	412	commission member exists.
413	413	(c) If the executive director has knowledge that a potential
414	414	ground for removal of a commission member exists, the executive
415	415	director shall notify the presiding officer of the commission of
416	416	the potential ground. The presiding officer shall then notify the
417	417	governor and the attorney general that a potential ground for
418	418	removal exists. If the potential ground for removal involves the
419	419	presiding officer, the executive director shall notify the next
420	420	highest officer of the commission, who shall notify the governor
421	421	and the attorney general that a potential ground for removal
422	422	exists.
423	423	Sec. 2021.058. TRAINING. (a) A person who is appointed to
424	424	and qualifies for office as a member of the commission may not vote,
425	425	deliberate, or be counted as a member in attendance at a meeting of
426	426	the commission until the person completes a training program that
427	427	complies with this section.
428	428	(b) The training program must provide the person with
429	429	information regarding:
430	430	(1) this subtitle and the other laws administered by
431	431	the commission;
432	432	(2) the commission's programs, functions, rules, and
433	433	budget;
434	434	(3) the results of the most recent formal audit of the
435	435	commission;
436	436	(4) the requirements of laws relating to open
437	437	meetings, public information, administrative procedure, and
438	438	conflict of interest; and
439	439	(5) any applicable ethics policies adopted by the
440	440	commission or the Texas Ethics Commission.
441	441	(c) A person appointed to the commission is entitled to
442	442	reimbursement, as provided by the General Appropriations Act, for
443	443	travel expenses incurred in attending the training program
444	444	regardless of whether the attendance at the program occurs before
445	445	or after the person qualifies for office.
446	446	Sec. 2021.059. QUALIFICATIONS AND STANDARDS OF CONDUCT
447	447	INFORMATION. The executive director or the executive director's
448	448	designee shall provide to members of the commission, as often as
449	449	necessary, information regarding their:
450	450	(1) qualifications for office under this chapter; and
451	451	(2) responsibilities under applicable laws relating
452	452	to standards of conduct for state officers.
453	453	Sec. 2021.060. BOND. (a) Before assuming the duties of
454	454	office, a member of the commission must execute a bond in the amount
455	455	of $25,000 payable to the state and conditioned on the member's
456	456	faithful performance of the member's duties of office.
457	457	(b) The bond must be approved by the governor.
458	458	(c) The cost of the bond shall be paid by the commission.
459	459	Sec. 2021.061. PROHIBITION OF CERTAIN ACTIVITIES. (a) A
460	460	member of the commission may not:
461	461	(1) use the member's official authority to affect the
462	462	result of an election or nomination for public office; or
463	463	(2) directly or indirectly coerce, attempt to coerce,
464	464	command, or advise a person to pay, lend, or contribute anything of
465	465	value to another person for political purposes.
466	466	(b) A commission member or the spouse of a commission member
467	467	may not solicit or accept employment from a license, certificate of
468	468	registration, finding of suitability, or approval holder under a
469	469	law administered by the commission or from an applicant for a
470	470	license, certificate, finding of suitability, or approval before
471	471	the second anniversary of the date the commission member's service
472	472	on the commission ends.
473	473	Sec. 2021.062. APPLICATION OF FINANCIAL DISCLOSURE LAW.
474	474	For purposes of Chapter 572, Government Code, a member of the
475	475	commission, the executive director, and the division directors are
476	476	appointed officers of a major state agency.
477	477	Sec. 2021.063. PER DIEM; EXPENSES. (a) A member of the
478	478	commission is entitled to:
479	479	(1) a per diem in an amount prescribed by
480	480	appropriation for each day spent in performing the duties of the
481	481	member; and
482	482	(2) reimbursement for actual and necessary expenses
483	483	incurred in performing those duties.
484	484	(b) Reimbursement for expenses under this section is
485	485	subject to any applicable limitation in the General Appropriations
486	486	Act.
487	487	Sec. 2021.064. EXECUTIVE DIRECTOR. (a) The commission
488	488	shall appoint an executive director, who serves at the pleasure of
489	489	the commission.
490	490	(b) A person holding an elective office or an officer or
491	491	official of a political party is not eligible for appointment as
492	492	executive director.
493	493	(c) The executive director must have five or more years of
494	494	responsible administrative experience in public or business
495	495	administration or possess broad management skills.
496	496	(d) The executive director may not pursue any other business
497	497	or occupation or hold any other office for profit.
498	498	(e) The executive director must meet all eligibility
499	499	requirements relating to members of the commission, except the
500	500	requirement for prior residency in this state.
501	501	(f) The executive director is entitled to an annual salary
502	502	and other compensation specified by the commission.
503	503	(g) The executive director may not, before the second
504	504	anniversary of the date the director's service to the commission
505	505	ends, acquire a direct or indirect interest in or be employed by a
506	506	person licensed or registered by the commission in connection with
507	507	the conduct of gaming or the provision of casino services in this
508	508	state.
509	509	Sec. 2021.065. OFFICES. The commission shall maintain its
510	510	primary office in Travis County and may maintain other offices
511	511	determined to be necessary by the commission.
512	512	Sec. 2021.066. AUTHORITY TO SUE OR BE SUED. (a) The
513	513	commission may sue and be sued.
514	514	(b) Service of process in a suit against the commission may
515	515	be secured by serving the executive director.
516	516	(c) A suit against the commission must be brought in Travis
517	517	County.
518	518	Sec. 2021.067. AUDIT. The transactions of the commission
519	519	are subject to audit by the state auditor under Chapter 321,
520	520	Government Code.
521	521	[Sections 2021.068-2021.100 reserved for expansion]
522	522	SUBCHAPTER C. POWERS AND DUTIES OF COMMISSION
523	523	Sec. 2021.101. GENERAL POWERS. (a) The commission has
524	524	broad authority and shall exercise strict control and close
525	525	supervision over all activities authorized and conducted in this
526	526	state under a law administered by the commission, including:
527	527	(1) this subtitle; and
528	528	(2) the Texas Racing Act (Article 179e, Vernon's Texas
529	529	Civil Statutes).
530	530	(b) The commission shall ensure that all casino games, slot
531	531	machine gaming, and other gaming activities subject to the
532	532	oversight or regulatory authority of the commission are conducted
533	533	fairly and in compliance with the law.
534	534	(c) The commission also has the powers and duties granted
535	535	under:
536	536	(1) Chapter 2022;
537	537	(2) Chapter 2023; and
538	538	(3) the Texas Racing Act (Article 179e, Vernon's Texas
539	539	Civil Statutes).
540	540	(d) All aspects of this subtitle and the other laws
541	541	administered by the commission, including those relating to
542	542	licensing, qualification, execution, and enforcement, shall be
543	543	administered by the executive director and the commission for the
544	544	protection of the public and in the public interest.
545	545	(e) The commission and the executive director have full
546	546	power and authority to hold hearings and, in connection with the
547	547	hearings, to issue subpoenas, to compel the attendance of witnesses
548	548	at any place in this state, to administer oaths, and to require
549	549	testimony under oath. Any process or notice relating to a hearing
550	550	may be served in the manner provided for service of process and
551	551	notices in civil actions. The commission and the executive
552	552	director may pay transportation and other expenses of witnesses as
553	553	they consider reasonable.
554	554	(f) The executive director and the executive director's
555	555	authorized employees may:
556	556	(1) inspect and examine a premises where gaming is
557	557	conducted or equipment or supplies, including an electronic or
558	558	other gaming device, or associated equipment is manufactured,
559	559	assembled, produced, programmed, sold, leased, marketed,
560	560	distributed, repaired, or modified for use in gaming;
561	561	(2) for good cause, seize and remove from a premises
562	562	and impound equipment or supplies for the purpose of examination
563	563	and inspection; and
564	564	(3) demand access to, inspect, examine, photocopy, or
565	565	audit papers, books, and records of applicants and license and
566	566	certificate holders, on their premises or elsewhere as practicable,
567	567	in the presence of the license or certificate holder or the license
568	568	or certificate holder's agent, reporting the gross income produced
569	569	by a gaming business, verification of the gross income, and other
570	570	matters affecting the enforcement of this subtitle or other law
571	571	administered by the commission.
572	572	(g) For the purpose of conducting audits after the cessation
573	573	of gaming by a license or certificate holder, a former license
574	574	holder shall furnish, on demand of the executive director or the
575	575	executive director's authorized employees, books, papers, and
576	576	records as necessary to conduct the audits. The former license or
577	577	certificate holder shall maintain all books, papers, and records
578	578	necessary for audits for three years after the date of the surrender
579	579	or revocation of the license or certificate and is responsible for
580	580	the costs incurred by the commission in the conduct of an audit
581	581	under this section. If the former license or certificate holder
582	582	seeks judicial review of a deficiency determination or files a
583	583	petition for a redetermination, the former license or certificate
584	584	holder must maintain all books, papers, and records until a final
585	585	order is entered on the determination.
586	586	(h) The commission shall contract with an independent
587	587	testing laboratory to scientifically test and technically evaluate
588	588	casino games, slot machine games, and associated equipment for
589	589	compliance with this subtitle. The independent testing laboratory
590	590	must have a national reputation of being demonstrably competent and
591	591	must be qualified to scientifically test and evaluate all
592	592	components of casino games, slot machine games, and associated
593	593	equipment for compliance with this subtitle and to perform the
594	594	functions assigned to it under this subtitle. An independent
595	595	testing laboratory may not be owned or controlled by a person
596	596	licensed to conduct casino or slot games or to manufacture gaming
597	597	equipment. The use of an independent testing laboratory for
598	598	purposes related to the conduct of gaming under this subtitle must
599	599	be made from a list of one or more laboratories approved by the
600	600	commission.
601	601	Sec. 2021.102. RULEMAKING AUTHORITY. (a) The commission
602	602	shall adopt rules the commission considers necessary or desirable
603	603	for the public interest in carrying out the policy and provisions of
604	604	this subtitle and the other laws administered by the commission.
605	605	(b) The rules shall set out:
606	606	(1) the method and form of application that an
607	607	applicant for a license or certificate of registration under this
608	608	subtitle must follow and complete before consideration of an
609	609	application by the commission;
610	610	(2) the information to be furnished by an applicant or
611	611	license or certificate holder under Chapter 2022 concerning
612	612	antecedents, habits, character, associates, criminal record,
613	613	business activities, and financial affairs;
614	614	(3) the criteria to be used in the award, revocation,
615	615	and suspension of licenses or certificates under Chapter 2022;
616	616	(4) the information to be furnished by a license or
617	617	certificate holder under Chapter 2022 relating to the holder's
618	618	employees;
619	619	(5) the manner and procedure of hearings conducted by
620	620	the commission or a hearing examiner of the commission;
621	621	(6) the payment of fees or costs an applicant or
622	622	license or certificate holder under Chapter 2022 must pay;
623	623	(7) the procedures for the issuance of temporary
624	624	licenses and certificates and temporary qualification to hold
625	625	equity interests and creditor interests in owner's license and
626	626	certificate holders under Chapter 2022;
627	627	(8) the manner and method of collection and payment of
628	628	fees and the issuance of licenses and certificates;
629	629	(9) the definition of "unsuitable method of
630	630	operation";
631	631	(10) the conditions under which the nonpayment of a
632	632	gambling debt by a license or certificate holder constitutes
633	633	grounds for disciplinary action;
634	634	(11) the manner of approval of gambling games, slot
635	635	machines, and other electronic gaming devices;
636	636	(12) access to confidential information obtained
637	637	under this chapter, Chapter 2022, Chapter 2023, or other law and
638	638	means to ensure that the confidentiality of the information is
639	639	maintained and protected;
640	640	(13) financial reporting and internal control
641	641	requirements for license or certificate holders;
642	642	(14) the manner in which money awarded to players of
643	643	casino games, compensation from casino games and slot machines,
644	644	gross gaming revenue, and net slot income must be computed and
645	645	reported under Chapter 2022;
646	646	(15) requirements for the annual audit of the
647	647	financial statements of a license or certificate holder;
648	648	(16) requirements for periodic financial reports from
649	649	each license or certificate holder consistent with standards and
650	650	intervals prescribed by the commission;
651	651	(17) the procedures to be followed by a license or
652	652	certificate holder for excluding a person from a casino or slot
653	653	establishment; and
654	654	(18) the procedures for exempting or waiving
655	655	institutional investors from the licensing or registration
656	656	requirements for shareholders of publicly traded corporations.
657	657	Sec. 2021.103. AUTHORITY OF EXECUTIVE DIRECTOR. (a) With
658	658	commission approval, the executive director may create executive
659	659	positions as the director considers necessary to implement the
660	660	provisions of this chapter, Chapter 2022, Chapter 2023, and any
661	661	other law administered by the commission.
662	662	(b) The executive director shall employ directors in the
663	663	areas of audit, investigation, and enforcement. The audit director
664	664	must be a certified public accountant, have five or more years of
665	665	progressively responsible experience in general accounting, and
666	666	have a comprehensive knowledge of the principles and practices of
667	667	corporate finance or must possess qualifications of an expert in
668	668	the field of corporate finance and auditing, general finance,
669	669	gaming, and economics. Other directors must possess five or more
670	670	years of training and experience in the fields of investigation,
671	671	law enforcement, law, or gaming.
672	672	(c) The executive director may investigate, for the purpose
673	673	of prosecution, a suspected criminal violation of this subtitle or
674	674	another law administered by the commission. For the purpose of the
675	675	administration and enforcement of this subtitle or another law
676	676	administered by the commission, the executive director and
677	677	employees designated by the executive director may be commissioned
678	678	as peace officers.
679	679	(d) The executive director, to further the objectives and
680	680	purposes of this subtitle or another law administered by the
681	681	commission, may:
682	682	(1) direct and supervise all administrative actions of
683	683	the commission;
684	684	(2) bring legal action in the name and on behalf of the
685	685	commission;
686	686	(3) make, execute, and effect an agreement or contract
687	687	authorized by the commission;
688	688	(4) employ the services of persons considered
689	689	necessary for consultation or investigation and set the salaries of
690	690	or contract for the services of legal, professional, technical, and
691	691	operational personnel and consultants, except that outside legal
692	692	assistance may be retained only with the approval of the attorney
693	693	general;
694	694	(5) acquire furnishings, equipment, supplies,
695	695	stationery, books, and all other things the executive director
696	696	considers necessary or desirable in carrying out the executive
697	697	director's functions; and
698	698	(6) perform other duties the executive director may
699	699	consider necessary to effect the purposes of this subtitle or
700	700	another law administered by the commission.
701	701	(e) Except as otherwise provided in this subtitle, the costs
702	702	of administration incurred by the executive director shall be paid
703	703	in the same manner as other claims against the state are paid.
704	704	Sec. 2021.104. OFFICE OF HEARING EXAMINERS. (a) The
705	705	commission shall create an office of hearing examiners to assist
706	706	the commission in carrying out its powers and duties.
707	707	(b) The office of hearing examiners shall:
708	708	(1) hold hearings under the authority of the
709	709	commission on matters relating to the commission's administration
710	710	of this subtitle or another law administered by the commission as
711	711	the commission orders; and
712	712	(2) report after hearing in the manner prescribed by
713	713	the commission.
714	714	(c) The commission shall refer any contested case arising
715	715	under this subtitle or another law administered by the commission
716	716	to the office of hearing examiners.
717	717	(d) The office of hearing examiners is independent of the
718	718	executive director and is under the exclusive control of the
719	719	commission.
720	720	(e) The office of hearing examiners is under the direction
721	721	of a chief hearing examiner appointed by the commission.
722	722	(f) The commission may authorize the chief hearing examiner
723	723	to delegate to one or more hearing examiners the authority to hold
724	724	any hearing called by the chief hearing examiner.
725	725	(g) The chief hearing examiner and all assistant hearing
726	726	examiners employed by the office of hearing examiners must be
727	727	attorneys licensed to practice law in this state.
728	728	(h) The chief hearing examiner and all assistant hearing
729	729	examiners may administer oaths, receive evidence, and issue
730	730	subpoenas to compel the attendance of witnesses and the production
731	731	of papers and documents in all matters delegated by the commission.
732	732	(i) The chief hearing examiner and all assistant hearing
733	733	examiners are entitled to an annual salary and other compensation
734	734	specified by the commission.
735	735	(j) The office of hearing examiners may contract for
736	736	additional services it considers necessary to carry out its powers.
737	737	Sec. 2021.105. JUDICIAL REVIEW IN CONTESTED CASES. A final
738	738	ruling of the commission in a contested case is subject to judicial
739	739	review under Chapter 2001, Government Code. Judicial review is
740	740	under the substantial evidence rule.
741	741	Sec. 2021.106. RECORDS; CONFIDENTIAL INFORMATION. (a) The
742	742	executive director shall maintain a file of all applications for
743	743	licenses, certificates of registration, findings of suitability,
744	744	or approvals under this subtitle or another law administered by the
745	745	commission, together with a record of all action taken with respect
746	746	to the applications.
747	747	(b) The commission and the executive director may maintain
748	748	other records they consider desirable.
749	749	(c) The information made confidential by this subsection
750	750	may be disclosed, wholly or partly, only in the course of the
751	751	necessary administration of this subtitle or other law administered
752	752	by the commission, under Section 2022.402, or on the order of a
753	753	court of competent jurisdiction, except that the executive director
754	754	or the commission may disclose the information to an authorized
755	755	agent of any agency of the United States, another state, or a
756	756	political subdivision of this state authorized under commission
757	757	rules. Notice of the content of any information furnished or
758	758	released under this subsection may be given to any affected
759	759	applicant or license, certificate of registration, finding of
760	760	suitability, or approval holder as prescribed by commission rule.
761	761	The following information is confidential:
762	762	(1) information requested by the commission or the
763	763	executive director to be furnished to either of them under this
764	764	subtitle or another law administered by the commission or that may
765	765	otherwise be obtained relating to the finances, earnings, or
766	766	revenue of an applicant or license, certificate, finding of
767	767	suitability, or approval holder;
768	768	(2) information pertaining to an applicant's criminal
769	769	record, antecedents, and background that has been furnished to or
770	770	obtained by the commission or the executive director from any
771	771	source;
772	772	(3) information provided to the commission or the
773	773	executive director or a commission employee by a governmental
774	774	agency or an informer or on the assurance that the information will
775	775	be held in confidence and treated as confidential;
776	776	(4) information obtained by the executive director or
777	777	the commission from a license, certificate, finding of suitability,
778	778	or approval holder, including a casino service license holder,
779	779	relating to the manufacturing, modification, or repair of gaming
780	780	devices;
781	781	(5) security plans and procedures of the commission
782	782	designed to ensure the integrity and security of the regulation and
783	783	operation of gaming;
784	784	(6) the street address and telephone number of a prize
785	785	winner, if the prize winner has not consented to the release of the
786	786	information; and
787	787	(7) information relating to all system operations of
788	788	gambling games, including security related to gambling games, and
789	789	commission plans and procedures intended to ensure the integrity
790	790	and security of the operation of gambling games.
791	791	Sec. 2021.107. REPRESENTATION BY ATTORNEY GENERAL. (a)
792	792	The attorney general shall represent the commission and the
793	793	executive director in any proceeding to which the commission or the
794	794	executive director is a party under this subtitle or another law
795	795	administered by the commission or in any suit filed against the
796	796	commission or executive director.
797	797	(b) The office of the attorney general on request shall
798	798	advise the commission and the executive director in all other
799	799	matters, including representing the commission when the commission
800	800	acts in its official capacity.
801	801	Sec. 2021.108. RULES RESTRICTING ADVERTISING OR
802	802	COMPETITIVE BIDDING. (a) The commission may not adopt rules
803	803	restricting advertising or competitive bidding by a person
804	804	regulated by the commission except to prohibit false, misleading,
805	805	or deceptive practices by that person.
806	806	(b) The commission may not include in its rules to prohibit
807	807	false, misleading, or deceptive practices by a person regulated by
808	808	the commission a rule that:
809	809	(1) restricts the use of any advertising medium;
810	810	(2) restricts the person's personal appearance or the
811	811	use of the person's voice in an advertisement;
812	812	(3) relates to the size or duration of an
813	813	advertisement by the person; or
814	814	(4) restricts the use of a trade name in advertising by
815	815	the person.
816	816	Sec. 2021.109. RULES ON CONSEQUENCES OF CRIMINAL
817	817	CONVICTION. (a) The commission shall adopt rules necessary to
818	818	comply with Chapter 53.
819	819	(b) In its rules under this section, the commission shall
820	820	list the specific offenses for which a conviction would constitute
821	821	grounds for the commission to take action under Section 53.021.
822	822	Sec. 2021.110. SUBPOENA. (a) The commission may request
823	823	and, if necessary, compel by subpoena:
824	824	(1) the attendance of a witness for examination under
825	825	oath; and
826	826	(2) the production for inspection and copying of
827	827	records and other evidence relevant to the investigation of an
828	828	alleged violation of this subtitle or another law administered by
829	829	the commission.
830	830	(b) If a person fails to comply with a subpoena issued under
831	831	this section, the commission, acting through the attorney general,
832	832	may file suit to enforce the subpoena in a district court in Travis
833	833	County or in the county in which a hearing conducted by the
834	834	commission may be held.
835	835	(c) The court shall order a person to comply with the
836	836	subpoena if the court determines that good cause exists for issuing
837	837	the subpoena.
838	838	Sec. 2021.111. DIVISION OF RESPONSIBILITIES. The
839	839	commission shall develop and implement policies that clearly
840	840	separate the policymaking responsibilities of the commission and
841	841	the management responsibilities of the executive director and the
842	842	staff of the commission.
843	843	Sec. 2021.112. USE OF TECHNOLOGY. The commission shall
844	844	implement a policy requiring the commission to use appropriate
845	845	technological solutions to improve the commission's ability to
846	846	perform its functions. The policy must ensure that the public is
847	847	able to interact with the commission on the Internet.
848	848	Sec. 2021.113. NEGOTIATED RULEMAKING AND ALTERNATIVE
849	849	DISPUTE RESOLUTION POLICY. (a) The commission shall develop and
850	850	implement a policy to encourage the use of:
851	851	(1) negotiated rulemaking procedures under Chapter
852	852	2008, Government Code, for the adoption of commission rules; and
853	853	(2) appropriate alternative dispute resolution
854	854	procedures under Chapter 2009, Government Code, to assist in the
855	855	resolution of internal and external disputes under the commission's
856	856	jurisdiction.
857	857	(b) The commission's procedures relating to alternative
858	858	dispute resolution must conform, to the extent possible, to any
859	859	model guidelines issued by the State Office of Administrative
860	860	Hearings for the use of alternative dispute resolution by state
861	861	agencies.
862	862	(c) The commission shall designate a trained person to:
863	863	(1) coordinate the implementation of the policy
864	864	adopted under Subsection (a);
865	865	(2) serve as a resource for any training needed to
866	866	implement the procedures for negotiated rulemaking or alternative
867	867	dispute resolution; and
868	868	(3) collect data concerning the effectiveness of those
869	869	procedures, as implemented by the commission.
870	870	Sec. 2021.114. COMMITTEES. The commission may appoint
871	871	committees that it considers necessary to carry out its duties.
872	872	Sec. 2021.115. DIVISIONS. (a) The commission shall
873	873	establish separate divisions to oversee and regulate:
874	874	(1) casino gaming and slot machine gaming conducted
875	875	under Chapters 2022 and 2023; and
876	876	(2) pari-mutuel racing.
877	877	(b) To facilitate the operations of the commission or a
878	878	division of the commission, the commission or executive director
879	879	may delegate to a division or a division director a specific power
880	880	or duty given to the commission or executive director under this
881	881	subtitle or other law.
882	882	(c) A division director shall, at the request of the
883	883	executive commissioner, assist in the development of rules and
884	884	policies for the operation and provision of a division of the
885	885	commission. The division director:
886	886	(1) acts on behalf of the executive director in
887	887	performing the delegated function; and
888	888	(2) reports to the executive director regarding the
889	889	delegated function and any matter affecting commission programs and
890	890	operations.
891	891	(d) The commission shall delegate responsibilities in the
892	892	administration of Chapter 2022 or 2023 to the executive director,
893	893	the director of the appropriate division, and the division's staff,
894	894	but may not delegate the following actions:
895	895	(1) a final determination in any application or
896	896	request for licensing, registration, finding of suitability, or
897	897	other affirmative regulatory approval;
898	898	(2) a final determination in any proceeding involving
899	899	the suspension or revocation of a license, certificate of
900	900	registration, finding of suitability, or other affirmative
901	901	regulatory approval;
902	902	(3) a final determination that Chapter 2022 or 2023
903	903	has been violated; or
904	904	(4) a final determination or imposition of an
905	905	assessment of fines or penalties.
906	906	Sec. 2021.116. CONTRACT AUTHORITY. (a) The commission and
907	907	executive director have broad authority and shall exercise strict
908	908	control and close supervision over gambling games played in this
909	909	state to promote and ensure integrity, security, honesty, and
910	910	fairness in the operation and administration of gaming under this
911	911	subtitle.
912	912	(b) The executive director may contract with or employ a
913	913	person to perform a function, activity, or service in connection
914	914	with the operation of gaming under this subtitle or another law
915	915	administered by the commission as prescribed by the executive
916	916	director. A contract relating to the operation of gaming must be
917	917	consistent with this subtitle.
918	918	(c) The executive director may award a contract for gaming
919	919	supplies, equipment, or services, including a contract under
920	920	Subsection (b), pending the completion of any investigation and
921	921	license, certificate of registration, finding of suitability, or
922	922	other affirmative regulatory approval authorized or required by
923	923	this subtitle. A contract awarded under this subsection must
924	924	include a provision permitting the executive director to terminate
925	925	the contract without penalty if the investigation reveals that the
926	926	person to whom the contract is awarded does not satisfy the
927	927	applicable requirements for a license, certificate of
928	928	registration, finding of suitability, or other affirmative
929	929	regulatory approval under this subtitle.
930	930	(d) In the acquisition or provision of facilities,
931	931	supplies, equipment, materials, or services related to the
932	932	implementation of gaming under Chapter 2022 or 2023, the commission
933	933	must comply with procurement procedures prescribed under Subtitle
934	934	D, Title 10, Government Code.
935	935	Sec. 2021.117. INVESTIGATIONS AND ENFORCEMENT. (a) The
936	936	attorney general, the district attorney for Travis County, or the
937	937	district attorney, criminal district attorney, or county attorney
938	938	for the county in which the violation or alleged violation occurred
939	939	may investigate a violation or alleged violation of this subtitle
940	940	or of the penal laws of this state by the commission, its employees,
941	941	or a person regulated under this subtitle.
942	942	(b) The commission may investigate violations of this
943	943	subtitle and rules adopted under this subtitle or another law
944	944	administered by the commission and may file a complaint requesting
945	945	that an investigation be conducted as provided by Subsection (a).
946	946	Sec. 2021.118. SECURITY. (a) The executive director shall
947	947	maintain a department of security in the commission. The executive
948	948	director shall appoint a deputy to administer the department. The
949	949	deputy must be qualified by training and experience in law
950	950	enforcement or security to supervise, direct, and administer the
951	951	activities of the department.
952	952	(b) The executive director may employ security officers or
953	953	investigators as the executive director considers necessary and may
954	954	commission security officers or investigators as peace officers.
955	955	The deputy and all investigators employed by the department of
956	956	security as peace officers must meet the requirements under Chapter
957	957	415, Government Code, for employment and commission as peace
958	958	officers.
959	959	(c) A security officer or investigator employed by the
960	960	department of security or a peace officer who is working in
961	961	conjunction with the commission or the Department of Public Safety
962	962	in the enforcement of this subtitle may:
963	963	(1) without a search warrant, search and seize a
964	964	gaming device or other gaming equipment that is located on premises
965	965	for which a person holds a license issued under this subtitle; or
966	966	(2) seize a gaming device or other gaming equipment
967	967	that is being used or is in the possession of any person in
968	968	violation of this subtitle or another law administered by the
969	969	commission.
970	970	(d) The Department of Public Safety or any other state or
971	971	local law enforcement agency in this state, at the commission's
972	972	request and in accordance with an interagency agreement, shall
973	973	perform a full criminal background investigation of a prospective
974	974	deputy or investigator of the department of security. The
975	975	commission shall reimburse the agency for the actual costs of an
976	976	investigation.
977	977	(e) At least once every two years, the executive director
978	978	shall employ an independent firm that is experienced in security,
979	979	including computer security and systems security, to conduct a
980	980	comprehensive study of all aspects of gaming security.
981	981	Sec. 2021.119. DEMOGRAPHIC STUDIES. (a) The executive
982	982	director shall, every two years, employ an independent firm
983	983	experienced in demographic analysis to conduct a demographic study
984	984	of players of gambling games. The study must include the income,
985	985	age, sex, race, education, and frequency of participation of
986	986	players of the games.
987	987	(b) The executive director shall report the results of the
988	988	demographic study to the commission, the governor, and the
989	989	legislature before January 1 of each odd-numbered year.
990	990	Sec. 2021.120. PROHIBITED GAMES. (a) Except as provided by
991	991	this subtitle or other law, the executive director or any other
992	992	person may not establish or operate a gambling game in which the
993	993	winner is chosen on the basis of the outcome of a sports event.
994	994	(b) Except as provided by Chapter 2001 or this subtitle, the
995	995	operation of any game using a slot machine or other gambling device
996	996	that is not authorized under this subtitle is prohibited.
997	997	(c) In this section, "sports event" means a football,
998	998	basketball, baseball, or similar game, a boxing or martial arts
999	999	match, or a horse or dog race on which pari-mutuel wagering is
1000	1000	allowed.
1001	1001	Sec. 2021.121. REPORTS OF NET SLOT INCOME. The executive
1002	1002	director shall prepare a monthly report of the total net slot income
1003	1003	for all slot establishments for the preceding month.
1004	1004	Sec. 2021.122. DEPARTMENT OF PUBLIC SAFETY RECORDS. (a)
1005	1005	Except as otherwise provided by this subtitle, all files, records,
1006	1006	information, compilations, documents, photographs, reports,
1007	1007	summaries, and reviews of information and related matters
1008	1008	collected, retained, or compiled by the Department of Public Safety
1009	1009	in the discharge of its duties under this subtitle are confidential
1010	1010	and are not subject to public disclosure. Each of those items is
1011	1011	subject to discovery by a person that is the subject of the item.
1012	1012	(b) An investigation report or other document submitted by
1013	1013	the Department of Public Safety to the commission becomes part of
1014	1014	the investigative files of the commission and is subject to
1015	1015	discovery by a person that is the subject of the investigation
1016	1016	report or other document.
1017	1017	(c) Information that is in the form available to the public
1018	1018	is not privileged or confidential under this section and is subject
1019	1019	to public disclosure.
1020	1020	Sec. 2021.123. CRIMINAL HISTORY INVESTIGATION FOR GAMING.
1021	1021	(a) The commission is entitled to conduct an investigation of and
1022	1022	is entitled to obtain criminal history record information
1023	1023	maintained by the Department of Public Safety, the Federal Bureau
1024	1024	of Investigation Identification Division, or another law
1025	1025	enforcement agency to assist in the investigation of any person
1026	1026	directly involved with gaming regulated under this subtitle.
1027	1027	(b) Except as otherwise provided by this subtitle, a
1028	1028	criminal history investigation is governed by commission rules
1029	1029	adopted under this chapter. As applicable, the commission shall
1030	1030	consider information obtained through a criminal history
1031	1031	investigation conducted under the Texas Racing Act (Article 179e,
1032	1032	Vernon's Texas Civil Statutes).
1033	1033	(c) The Department of Public Safety or a state or local law
1034	1034	enforcement agency in this state, in accordance with an interagency
1035	1035	agreement with the commission, shall provide any assistance
1036	1036	requested by the commission in the administration and enforcement
1037	1037	of this subtitle, including conducting background investigations
1038	1038	of a person seeking a license, certificate of registration, finding
1039	1039	of suitability, or other affirmative regulatory approval required
1040	1040	under this subtitle or of any person required to be named in an
1041	1041	application for a license, certificate of registration, finding of
1042	1042	suitability, or other affirmative regulatory approval under this
1043	1043	subtitle.
1044	1044	(d) This section does not limit the commission's right to
1045	1045	obtain criminal history record information from any other local,
1046	1046	state, or federal agency. The commission may enter into a
1047	1047	confidentiality agreement with the agency as necessary and proper.
1048	1048	(e) Except as otherwise provided by this subtitle or other
1049	1049	law, criminal history record information obtained by the commission
1050	1050	under this section may be disclosed only:
1051	1051	(1) to another law enforcement agency to assist in or
1052	1052	further an investigation related to the commission's operation and
1053	1053	oversight of gaming; or
1054	1054	(2) under a court order.
1055	1055	Sec. 2021.124. PLAYER AGREEMENT TO ABIDE BY RULES AND
1056	1056	INSTRUCTIONS. By participating as a player in a gambling game, a
1057	1057	player agrees to abide by and be bound by the commission's rules and
1058	1058	instructions, including the rules or instructions applicable to the
1059	1059	particular gambling game involved. The player also acknowledges
1060	1060	that the determination of whether the player is a valid winner is
1061	1061	subject to:
1062	1062	(1) the commission's rules, instructions, and claims
1063	1063	procedures, including those developed for the particular gambling
1064	1064	game involved;
1065	1065	(2) any validation tests established by the commission
1066	1066	for the particular gambling game involved; and
1067	1067	(3) the limitations and other provisions prescribed by
1068	1068	this subtitle.
1069	1069	Sec. 2021.125. VENUE. Venue is proper in Travis County or
1070	1070	any county in which venue is proper under Chapter 13, Code of
1071	1071	Criminal Procedure, for:
1072	1072	(1) an offense under this subtitle;
1073	1073	(2) an offense under the Penal Code, if the accused:
1074	1074	(A) is regulated under this subtitle; and
1075	1075	(B) is alleged to have committed the offense
1076	1076	while engaged in gaming activities; or
1077	1077	(3) an offense under Title 7 or 11, Penal Code, that
1078	1078	involves property consisting of or including a gaming device or
1079	1079	gambling game prize.
1080	1080	[Sections 2021.126-2021.150 reserved for expansion]
1081	1081	SUBCHAPTER D. PUBLIC PARTICIPATION AND COMPLAINT PROCEDURES
1082	1082	Sec. 2021.151. PUBLIC INTEREST INFORMATION. (a) The
1083	1083	commission shall prepare and disseminate consumer information that
1084	1084	describes the regulatory functions of the commission and the
1085	1085	procedures by which consumer complaints are filed with and resolved
1086	1086	by the commission.
1087	1087	(b) The commission shall make the information available to
1088	1088	the public and appropriate state agencies.
1089	1089	Sec. 2021.152. COMPLAINTS. (a) The commission by rule
1090	1090	shall establish methods by which consumers and service recipients
1091	1091	are notified of the name, mailing address, and telephone number of
1092	1092	the commission for the purpose of directing complaints to the
1093	1093	commission. The commission may provide for that notice:
1094	1094	(1) on each form, application, or written contract for
1095	1095	services of a person regulated under a law administered by the
1096	1096	commission;
1097	1097	(2) on a sign prominently displayed in the place of
1098	1098	business of each person regulated under a law administered by the
1099	1099	commission; or
1100	1100	(3) in a bill for service provided by a person
1101	1101	regulated under a law administered by the commission.
1102	1102	(b) The commission shall list with its regular telephone
1103	1103	number any toll-free telephone number established under other state
1104	1104	law that may be called to present a complaint about a person
1105	1105	regulated under a law administered by the commission.
1106	1106	Sec. 2021.153. RECORDS OF COMPLAINTS. (a) The commission
1107	1107	shall maintain a system to promptly and efficiently act on
1108	1108	complaints filed with the commission. The commission shall
1109	1109	maintain:
1110	1110	(1) information about the parties to the complaint and
1111	1111	the subject matter of the complaint;
1112	1112	(2) a summary of the results of the review or
1113	1113	investigation of the complaint; and
1114	1114	(3) information about the disposition of the
1115	1115	complaint.
1116	1116	(b) The commission shall make information available
1117	1117	describing its procedures for complaint investigation and
1118	1118	resolution.
1119	1119	(c) The commission shall periodically notify the parties of
1120	1120	the status of the complaint until final disposition of the
1121	1121	complaint.
1122	1122	Sec. 2021.154. GENERAL RULES REGARDING COMPLAINT
1123	1123	INVESTIGATION AND DISPOSITION. The commission shall adopt rules
1124	1124	concerning the investigation of a complaint filed with the
1125	1125	commission. The rules must:
1126	1126	(1) distinguish between categories of complaints;
1127	1127	(2) ensure that complaints are not dismissed without
1128	1128	appropriate consideration;
1129	1129	(3) require that the commission be advised of a
1130	1130	complaint that is dismissed and that a letter be sent to the person
1131	1131	who filed the complaint explaining the action taken on the
1132	1132	dismissed complaint;
1133	1133	(4) ensure that the person who files a complaint has an
1134	1134	opportunity to explain the allegations made in the complaint; and
1135	1135	(5) prescribe guidelines concerning the categories of
1136	1136	complaints that require the use of a private investigator and the
1137	1137	procedures for the commission to obtain the services of a private
1138	1138	investigator.
1139	1139	Sec. 2021.155. DISPOSITION OF COMPLAINT. (a) The
1140	1140	commission shall:
1141	1141	(1) dispose of each complaint in a timely manner; and
1142	1142	(2) establish a schedule for conducting each phase of
1143	1143	a complaint that is under the control of the commission not later
1144	1144	than the 30th day after the date the commission receives the
1145	1145	complaint.
1146	1146	(b) Each party shall be notified of the projected time
1147	1147	requirements for pursuing the complaint. The commission shall
1148	1148	notify each party to the complaint of any change in the schedule
1149	1149	established under Subsection (a)(2) not later than the seventh day
1150	1150	after the date the change is made.
1151	1151	(c) The executive director shall notify the commission of a
1152	1152	complaint that is not resolved within the time prescribed by the
1153	1153	commission for resolving the complaint.
1154	1154	Sec. 2021.156. PUBLIC PARTICIPATION. (a) The commission
1155	1155	shall develop and implement policies that provide the public with a
1156	1156	reasonable opportunity to appear before the commission and to speak
1157	1157	on any issue under the commission's jurisdiction.
1158	1158	(b) The commission shall prepare and maintain a written plan
1159	1159	that describes how a person who does not speak English may be
1160	1160	provided reasonable access to the commission's programs.
1161	1161	Sec. 2021.157. INFORMAL SETTLEMENT CONFERENCE. The
1162	1162	commission shall establish guidelines for an informal settlement
1163	1163	conference related to a complaint filed with the commission.
1164	1164	CHAPTER 2022. CASINO AND SLOT GAMING
1165	1165	SUBCHAPTER A. GENERAL PROVISIONS
1166	1166	Sec. 2022.001. PUBLIC POLICY. (a) All casino gaming that
1167	1167	is conducted in this state and that is authorized by law shall be
1168	1168	regulated and licensed under this chapter, unless federal law or
1169	1169	another state law specifically provides otherwise.
1170	1170	(b) The legislature hereby finds, and declares it to be the
1171	1171	public policy of this state, that:
1172	1172	(1) the development of regulated limited casino gaming
1173	1173	in the state will benefit the general welfare of the people of this
1174	1174	state by enhancing investment, development, and tourism in this
1175	1175	state, resulting in new jobs and additional revenues to the state;
1176	1176	(2) the conduct of regulated casino gaming in a
1177	1177	limited number of casinos and slot establishments will not harm the
1178	1178	people of this state;
1179	1179	(3) the regulation of gaming in this state is
1180	1180	important to ensure that gaming is:
1181	1181	(A) conducted honestly and competitively; and
1182	1182	(B) free from criminal and corruptive elements;
1183	1183	(4) public confidence and trust can be maintained only
1184	1184	by strict regulation of all persons, locations, practices,
1185	1185	associations, and activities related to the conduct of gaming and
1186	1186	the casino service industry;
1187	1187	(5) persons owning any direct or indirect material
1188	1188	interest in a casino should be licensed and controlled to protect
1189	1189	the public health, safety, morals, good order, and general welfare
1190	1190	of the people of this state;
1191	1191	(6) certain operators and employees of casinos and
1192	1192	slot establishments should be regulated, licensed, and controlled
1193	1193	to accomplish and promote these public policies while protecting
1194	1194	the public health, safety, morals, good order, and general welfare
1195	1195	of the people of this state;
1196	1196	(7) certain persons engaging in the casino service
1197	1197	industry should be regulated, licensed, and controlled to
1198	1198	accomplish and promote these public policies while protecting the
1199	1199	public health, safety, morals, good order, and general welfare of
1200	1200	the people of this state; and
1201	1201	(8) it is the intent of this chapter, where possible,
1202	1202	to use the resources, goods, labor, and services of the people of
1203	1203	this state in the ownership, operation, and construction of casinos
1204	1204	and slot establishments and related amenities to the extent
1205	1205	allowable by law.
1206	1206	Sec. 2022.002. EXEMPTION FROM FEDERAL STATUTES. (a) Under
1207	1207	Section 2, 64 Stat. 1134 (15 U.S.C. Section 1172), this state
1208	1208	declares that this state is exempt from that section.
1209	1209	(b) All shipments of gaming devices into this state,
1210	1210	including slot machines, conducted in compliance with the
1211	1211	applicable provisions of 15 U.S.C. Sections 1173 and 1174 are legal
1212	1212	shipments of the devices into this state.
1213	1213	Sec. 2022.003. CONSTRUCTION; APPLICABILITY OF OTHER LAWS.
1214	1214	(a) Nothing in this chapter may be construed to implicitly repeal
1215	1215	or modify existing state laws with respect to gambling, except that
1216	1216	gaming devices or slot machines are not prohibited by another law if
1217	1217	conducted as authorized under this chapter.
1218	1218	(b) To the extent of any inconsistency between Chapter 2003,
1219	1219	Government Code, and this chapter or a commission rule governing
1220	1220	gaming devices, this chapter or the commission rule controls in all
1221	1221	matters related to gaming devices, including hearings before the
1222	1222	State Office of Administrative Hearings.
1223	1223	Sec. 2022.004. AUTHORITY TO IMPLEMENT GAMING. (a) The
1224	1224	commission may implement gaming in accordance with this subtitle
1225	1225	and, for a slot establishment at a racetrack, the Texas Racing Act
1226	1226	(Article 179e, Vernon's Texas Civil Statutes). This chapter
1227	1227	supersedes any conflicting or inconsistent provision of the Texas
1228	1228	Racing Act.
1229	1229	(b) The commission shall allow the operation of gaming
1230	1230	pursuant to this subtitle at locations on Indian lands in
1231	1231	accordance with an effective gaming agreement and in compliance
1232	1232	with applicable federal law.
1233	1233	Sec. 2022.005. RULES FOR ADDITIONAL QUALIFICATIONS. The
1234	1234	commission by rule may establish other license, certificate of
1235	1235	registration, finding of suitability, or approval qualifications
1236	1236	under this chapter that the commission determines are in the public
1237	1237	interest and consistent with the declared policy of this state.
1238	1238	Sec. 2022.006. IMMUNITY FOR STATEMENT MADE IN PROCEEDING OR
1239	1239	INVESTIGATION. Any written or oral statement made in the course of
1240	1240	an official commission proceeding or investigative activities
1241	1241	related to an application for commission licensing, certificate of
1242	1242	registration, finding of suitability, or other affirmative
1243	1243	regulatory approval under this chapter, by any member or agent of
1244	1244	the commission or any witness testifying under oath, that is
1245	1245	relevant to the purpose of the proceeding is absolutely privileged
1246	1246	and does not impose liability for defamation or constitute a ground
1247	1247	for recovery in any civil action.
1248	1248	Sec. 2022.007. FINDING OF SUITABILITY. To promote the
1249	1249	integrity and security of gaming under this subtitle, the
1250	1250	commission in its discretion may require a finding of suitability
1251	1251	for any person doing business with or in relation to the operation
1252	1252	of gaming who is not otherwise required to obtain a license,
1253	1253	certificate of registration, or other affirmative regulatory
1254	1254	approval from the commission for the person's gaming-related
1255	1255	operations.
1256	1256	Sec. 2022.008. CONSENT TO COMMISSION DETERMINATION. (a)
1257	1257	An application for a license, certificate of registration, finding
1258	1258	of suitability, or other affirmative regulatory approval under this
1259	1259	chapter constitutes a request to the commission for a decision on
1260	1260	the applicant's general suitability, character, integrity, and
1261	1261	ability to participate or engage in or be associated with gaming
1262	1262	under this chapter in the manner or position sought.
1263	1263	(b) By filing an application with the commission, the
1264	1264	applicant specifically consents to the commission's decision at the
1265	1265	commission's election when the application, after filing, becomes
1266	1266	moot for any reason other than death.
1267	1267	Sec. 2022.009. ABSOLUTE AUTHORITY OF COMMISSION. To
1268	1268	protect the integrity of gaming under this subtitle or the public
1269	1269	health, welfare, or safety, or to prevent financial loss to this
1270	1270	state, the commission has full and absolute power and authority to:
1271	1271	(1) deny any application or limit, condition,
1272	1272	restrict, revoke, or suspend any license, certificate of
1273	1273	registration, finding of suitability, or other affirmative
1274	1274	regulatory approval; and
1275	1275	(2) fine any person licensed, registered, found
1276	1276	suitable, or approved for any cause considered reasonable by the
1277	1277	commission.
1278	1278	Sec. 2022.010. LICENSING, REGISTRATION, SUITABILITY, AND
1279	1279	REGULATORY APPROVAL AS REVOCABLE PERSONAL PRIVILEGES. (a) An
1280	1280	applicant for a license, certificate of registration, finding of
1281	1281	suitability, or other affirmative regulatory approval under this
1282	1282	chapter does not have any right to the license, certificate of
1283	1283	registration, finding of suitability, or approval sought.
1284	1284	(b) Any license, certificate of registration, finding of
1285	1285	suitability, or other affirmative regulatory approval granted
1286	1286	under this chapter is a revocable privilege, and a holder of the
1287	1287	privilege does not acquire any vested right in or under the
1288	1288	privilege.
1289	1289	(c) The courts of this state do not have jurisdiction to
1290	1290	review a decision to deny, limit, or condition the license,
1291	1291	certificate of registration, finding of suitability, or approval
1292	1292	unless the judicial review is sought on the ground that the denial,
1293	1293	limitation, or condition is based on a suspect classification, such
1294	1294	as race, color, religion, sex, or national origin, in violation of
1295	1295	the Equal Protection Clause of the Fourteenth Amendment to the
1296	1296	United States Constitution. The state court must affirm the
1297	1297	commission's action unless the violation is proven by clear and
1298	1298	convincing evidence. If a state court has jurisdiction over a claim
1299	1299	under this section, then this state's sovereign immunity is waived
1300	1300	only to the extent expressly provided by Section 2022.410.
1301	1301	(d) A license, certificate of registration, finding of
1302	1302	suitability, or other affirmative regulatory approval granted or
1303	1303	renewed under this chapter may not be transferred or assigned to
1304	1304	another person unless approved in advance by the commission, and a
1305	1305	license, certificate, finding of suitability, or approval may not
1306	1306	be pledged as collateral. The purchaser or successor of a person
1307	1307	who has been granted a license, certificate, finding of
1308	1308	suitability, or approval must independently qualify for a license,
1309	1309	certificate, finding of suitability, or approval required by this
1310	1310	chapter.
1311	1311	(e) The following acts void the license, certificate,
1312	1312	finding of suitability, or other affirmative regulatory approval of
1313	1313	the holder unless approved in advance by the commission:
1314	1314	(1) the transfer, sale, or other disposition of an
1315	1315	interest in the holder that results in a change in the identity of
1316	1316	an equity or creditor interest holder; or
1317	1317	(2) the sale of the assets of the holder, other than
1318	1318	assets bought and sold in the ordinary course of business, or any
1319	1319	interest in the assets, to any person not already determined to have
1320	1320	met the applicable qualifications of this chapter.
1321	1321	Sec. 2022.011. PRIZE RULES, PAYMENT, AND REDEMPTION. (a)
1322	1322	The commission shall adopt rules governing:
1323	1323	(1) the amount a player may be charged to play a
1324	1324	gambling game; and
1325	1325	(2) the prizes and credits that may be awarded to the
1326	1326	player of a gambling game.
1327	1327	(b) Payment of prizes is the sole and exclusive
1328	1328	responsibility of the casino or slot establishment, as applicable.
1329	1329	A prize may not be paid by the commission or this state except as
1330	1330	otherwise authorized.
1331	1331	(c) Nothing in this chapter limits the ability of a casino
1332	1332	or slot establishment to provide promotional prizes, including wide
1333	1333	area progressive networks, in addition to prize payouts regulated
1334	1334	by the commission.
1335	1335	(d) The commission shall enact rules consistent with this
1336	1336	section governing the use and redemption of prizes and credits
1337	1337	recorded on player account records, such as players' club cards and
1338	1338	smart cards.
1339	1339	Sec. 2022.012. REPORT ON LITIGATION. (a) A casino or slot
1340	1340	establishment shall report to the commission any litigation
1341	1341	relating to the casino or slot establishment, including a criminal
1342	1342	proceeding, a proceeding involving an issue related to racing
1343	1343	activities that impact slot machine operations, or a matter related
1344	1344	to character or reputation relevant to a person's suitability under
1345	1345	this chapter.
1346	1346	(b) The report required under Subsection (a) must be filed
1347	1347	not later than the fifth day after the date the owner or operator
1348	1348	acquires knowledge of the litigation.
1349	1349	Sec. 2022.013. COMMISSION APPROVAL REQUIRED FOR PROCEDURES
1350	1350	AND ADMINISTRATIVE AND ACCOUNTING CONTROLS. (a) The commission's
1351	1351	approval is required for all internal procedures and administrative
1352	1352	and accounting controls of a casino owner or operator or a slot
1353	1353	establishment owner or operator.
1354	1354	(b) The commission by rule shall establish general
1355	1355	accounting and auditing requirements and internal control
1356	1356	standards for casinos and slot establishments.
1357	1357	Sec. 2022.014. EMPLOYEE REPORTING. (a) On or before the
1358	1358	15th day of each month, a casino owner or operator or slot
1359	1359	establishment owner or operator shall submit to the commission an
1360	1360	employee report for the casino or slot establishment operated by
1361	1361	the owner or operator. For each employee of the casino or
1362	1362	establishment, the report must provide the employee's name, job
1363	1363	title, date of birth, and social security number.
1364	1364	(b) The employee report is confidential and may not be
1365	1365	disclosed except under commission order or in accordance with this
1366	1366	subtitle.
1367	1367	(c) The commission may conduct criminal history
1368	1368	investigations for employees of casinos or slot establishments.
1369	1369	(d) The commission may prohibit an employee from performing
1370	1370	any act relating to gaming if the commission finds that an employee
1371	1371	has:
1372	1372	(1) committed, attempted, or conspired to commit any
1373	1373	act prohibited by this chapter;
1374	1374	(2) concealed or refused to disclose any material fact
1375	1375	in any commission investigation;
1376	1376	(3) committed, attempted, or conspired to commit
1377	1377	larceny or embezzlement;
1378	1378	(4) been convicted in any jurisdiction of an offense
1379	1379	involving or relating to gambling;
1380	1380	(5) accepted employment in a position for which
1381	1381	commission approval is required after commission approval was
1382	1382	denied for a reason involving personal unsuitability or after
1383	1383	failing to apply for approval on commission request;
1384	1384	(6) been prohibited under color of governmental
1385	1385	authority from being present on the premises of any casino or slot
1386	1386	establishment or any establishment where pari-mutuel wagering is
1387	1387	conducted for any reason relating to improper gambling activity or
1388	1388	for any illegal act;
1389	1389	(7) willfully defied any legislative investigative
1390	1390	committee or other officially constituted body acting on behalf of
1391	1391	the United States or any state, county, or municipality that sought
1392	1392	to investigate alleged or potential crimes relating to gaming,
1393	1393	corruption of public officials, or any organized criminal
1394	1394	activities; or
1395	1395	(8) been convicted of any felony or any crime
1396	1396	involving moral turpitude.
1397	1397	(e) The commission may prohibit an employee from performing
1398	1398	any act relating to gaming based on a revocation or suspension of
1399	1399	any gaming or wagering license, certificate of registration,
1400	1400	finding of suitability, or other affirmative regulatory approval or
1401	1401	for any other reason the commission finds appropriate, including a
1402	1402	refusal by a regulatory authority to issue a license, certificate
1403	1403	of registration, finding of suitability, or other approval for the
1404	1404	employee to engage in or be involved with gaming or with regulated
1405	1405	gaming or pari-mutuel wagering in any jurisdiction.
1406	1406	(f) In this section, "employee" includes any person
1407	1407	connected directly with or compensated by an applicant or license
1408	1408	holder as an agent, personal representative, consultant,
1409	1409	independent contractor, or lobbyist for the advocacy of the
1410	1410	adoption or amendment of a law related to gaming activities or the
1411	1411	furtherance of gaming activities in any jurisdiction or as
1412	1412	otherwise specified by commission rule.
1413	1413	Sec. 2022.015. REPORT OF VIOLATIONS. A person who holds a
1414	1414	license, certificate of registration, finding of suitability, or
1415	1415	other affirmative regulatory approval under this chapter shall
1416	1416	immediately report a violation or suspected violation of this
1417	1417	chapter or a rule adopted under this chapter by any license,
1418	1418	certificate, suitability, or approval holder, by an employee of a
1419	1419	license, certificate, suitability, or approval holder, or by any
1420	1420	person on the premises of a casino or slot establishment, whether or
1421	1421	not associated with the license, certificate, suitability, or
1422	1422	approval holder.
1423	1423	Sec. 2022.016. INDEMNIFICATION, INSURANCE, AND BONDING
1424	1424	REQUIREMENTS. (a) A license, certificate, suitability, or
1425	1425	approval holder shall indemnify and hold harmless this state, the
1426	1426	commission, and all officers and employees of this state and the
1427	1427	commission from any and all claims which may be asserted against a
1428	1428	holder of a license, certificate, suitability, or approval, the
1429	1429	commission, this state, and the members, officers, employees, and
1430	1430	authorized agents of this state or the commission arising from the
1431	1431	license, certificate, suitability, or approval holder's
1432	1432	participation in gaming authorized under this subtitle.
1433	1433	(b) Surety and insurance required under this chapter shall
1434	1434	be issued by companies or financial institutions financially rated
1435	1435	"A" or better as rated by A.M. Best Company or other rating
1436	1436	organization designated by the commission and duly licensed,
1437	1437	admitted, and authorized to conduct business in this state, or by
1438	1438	other surety approved by the commission.
1439	1439	(c) The commission shall be named as the obligee in each
1440	1440	required surety and as an additional insured in each required
1441	1441	insurance contract.
1442	1442	(d) A casino owner or operator or a slot establishment owner
1443	1443	or operator may not be self-insured with regard to gaming
1444	1444	operations under this section.
1445	1445	(e) The commission by rule shall establish minimum
1446	1446	insurance coverage requirements for license holders under this
1447	1447	chapter, including:
1448	1448	(1) insurance for performance;
1449	1449	(2) insurance against losses caused by fraudulent or
1450	1450	dishonest acts by an officer or employee of the license holder;
1451	1451	(3) general liability insurance;
1452	1452	(4) property insurance;
1453	1453	(5) liability insurance for vehicles used and drivers
1454	1454	employed by a license holder; and
1455	1455	(6) crime insurance for the location.
1456	1456	Sec. 2022.017. LIABILITY FOR CREDIT AWARDED OR DENIED;
1457	1457	PLAYER DISPUTE. This state and the commission are not liable for
1458	1458	any gaming device malfunction or error by a casino or slot
1459	1459	establishment that causes credit to be wrongfully awarded or denied
1460	1460	to players.
1461	1461	[Sections 2022.018-2022.050 reserved for expansion]
1462	1462	SUBCHAPTER B. CASINO OWNER'S LICENSE
1463	1463	Sec. 2022.051. CASINO OWNER'S LICENSE. (a) Gaming may
1464	1464	lawfully be conducted in a casino operating under a casino owner's
1465	1465	license.
1466	1466	(b) It is unlawful for a person to own an equity interest in
1467	1467	a casino that conducts gaming in this state for which a casino
1468	1468	owner's license is not in effect.
1469	1469	(c) A separate casino owner's license must be obtained for
1470	1470	each casino conducting gaming.
1471	1471	Sec. 2022.052. ALLOCATION AND ISSUANCE OF CASINO OWNER'S
1472	1472	LICENSES; TEMPORARY LICENSE. (a) The commission shall award nine
1473	1473	casino owner's licenses to applicants for casino-anchored
1474	1474	destination attraction development projects as follows:
1475	1475	(1) seven casino owner's licenses in urban areas,
1476	1476	allocated by population; and
1477	1477	(2) two casino owner's licenses on islands in the Gulf
1478	1478	of Mexico that are tourist destinations with at least 1,000 guest
1479	1479	rooms available for visitors in hotels, motels, or condominiums
1480	1480	existing on January 1, 2009.
1481	1481	(b) In addition to the casino owner's licenses issued under
1482	1482	the other provisions of this section, the commission may issue
1483	1483	three additional casino owner's licenses to applicants based on
1484	1484	evidence that demonstrates that the issuance of the license to the
1485	1485	applicant would have a significant positive economic impact in the
1486	1486	area in which the casino would be operated and on this state.
1487	1487	(c) In addition to the casino owner's licenses issued under
1488	1488	the other provisions of this section, the commission may issue a
1489	1489	casino owner's license to a federally recognized Indian tribe that
1490	1490	had land in this state held in trust by the United States on January
1491	1491	1, 1998. A license under this subsection authorizes the tribe to
1492	1492	operate only one casino on tribal lands held in trust by the United
1493	1493	States on January 1, 1998.
1494	1494	(d) A casino owner's license issued by the commission under
1495	1495	Subsection (c) to an Indian tribe constitutes an agreement between
1496	1496	this state and the tribe for purposes of the Indian Gaming
1497	1497	Regulatory Act (18 U.S.C. Section 1166 et seq. and 25 U.S.C. Section
1498	1498	2701 et seq.).
1499	1499	(e) Except as to simulcast common pool wagering conducted in
1500	1500	a casino and except as otherwise authorized by the commission, the
1501	1501	casino operations and financial records of a casino owner's license
1502	1502	holder under Subsection (b) who also holds a pari-mutuel license
1503	1503	under the Texas Racing Act (Article 179e, Vernon's Texas Civil
1504	1504	Statutes) shall be kept separate from the racing operations and
1505	1505	records of the license holder.
1506	1506	(f) An Indian tribe to which Subsection (c) applies may, in
1507	1507	lieu of a casino owner's license, operate a casino on Indian land
1508	1508	described by Subsection (c) under an agreement with this state. The
1509	1509	agreement is governed by this chapter and Chapter 2023, except that
1510	1510	the commission by rule may modify the provisions of this chapter and
1511	1511	Chapter 2023 if necessary to make those provisions applicable to
1512	1512	casino gaming.
1513	1513	(g) Notwithstanding Subsections (a), (b), and (c):
1514	1514	(1) a license may not be issued in a county unless:
1515	1515	(A) a majority of the voters of the county voting
1516	1516	in the 2009 constitutional amendment election to authorize casino
1517	1517	gaming voted in favor of the proposition to authorize casino
1518	1518	gaming; or
1519	1519	(B) the voters of the county have approved a
1520	1520	proposition legalizing casino gaming at a local option election
1521	1521	held under this chapter;
1522	1522	(2) not more than three casino owner's licenses may be
1523	1523	issued for casinos to be located in the same county; and
1524	1524	(3) a casino owner's license may not be issued for a
1525	1525	location within an area in which casino gaming or slot gaming is
1526	1526	prohibited under a gaming agreement.
1527	1527	(h) In allocating licenses under this section and in
1528	1528	addition to the other suitability criteria described in this
1529	1529	chapter, the commission may favorably consider whether a
1530	1530	substantial percentage of the owners of a proposed casino facility
1531	1531	are residents of this state who have maintained their residency in
1532	1532	this state for not less than two years preceding the application
1533	1533	date.
1534	1534	(i) For purposes of determining the location of a casino, a
1535	1535	casino is considered to be located in the county in which the main
1536	1536	public entrance to the casino is located.
1537	1537	(j) The commission may issue a temporary license for one
1538	1538	year or less to authorize the casino owner's license holder to
1539	1539	temporarily conduct casino gaming in accordance with commission
1540	1540	rules at a location within 1,000 feet of the site for which the
1541	1541	casino license was granted.
1542	1542	(k) A person may not beneficially own, directly or
1543	1543	indirectly, an equity interest of more than five percent of the
1544	1544	total equity interest in more than three casino owner's license
1545	1545	holders.
1546	1546	(l) A person may not operate, either under a casino owner's
1547	1547	license or under a casino operator's license, more than three
1548	1548	casinos.
1549	1549	Sec. 2022.053. APPLICATION. (a) Application for a casino
1550	1550	owner's license shall be made according to the rules of the
1551	1551	commission and shall contain information the commission finds
1552	1552	necessary to determine the suitability and eligibility of the
1553	1553	applicant, the eligibility of the proposed location, and the
1554	1554	economic impact of the overall casino project.
1555	1555	(b) In addition to any other information the commission may
1556	1556	require, an application must include the following information
1557	1557	concerning the feasibility of the overall casino project:
1558	1558	(1) proof that gaming was approved under the 2009
1559	1559	constitutional amendment or has been approved through a local
1560	1560	option election under this chapter by the voters of the county where
1561	1561	the casino is to be located;
1562	1562	(2) evidence that the applicant possesses, or has the
1563	1563	right to acquire, sufficient real property on which the proposed
1564	1564	casino will be located in order to allow the applicant's
1565	1565	construction and operation of the casino project substantially as
1566	1566	proposed;
1567	1567	(3) evidence that the applicant possesses, or
1568	1568	reasonably expects to obtain, all state, county, and municipal
1569	1569	permits and approvals necessary for the construction and operation
1570	1570	of the proposed casino within the time periods prescribed in this
1571	1571	chapter; and
1572	1572	(4) evidence that the applicant is prepared to begin
1573	1573	construction of its proposed casino within 18 months of receiving a
1574	1574	casino owner's license and to proceed with the construction of the
1575	1575	casino without unnecessary delay.
1576	1576	(c) An applicant may apply for more than one casino owner's
1577	1577	license relating to more than one casino but must submit a separate
1578	1578	application for each casino for which a casino owner's license is
1579	1579	sought.
1580	1580	(d) An application for a casino owner's license must be
1581	1581	accompanied by the nonrefundable application fee set out in Section
1582	1582	2022.252.
1583	1583	Sec. 2022.054. MANDATORY REQUIREMENTS. (a) A company is
1584	1584	eligible to apply for and hold a casino owner's license only if:
1585	1585	(1) the company is incorporated or organized and in
1586	1586	good standing in this state or organized under the laws of another
1587	1587	state of the United States and qualified to do business in this
1588	1588	state; and
1589	1589	(2) the company complies with all the laws of this
1590	1590	state.
1591	1591	(b) To be eligible to receive a casino owner's license to
1592	1592	own a casino, an applicant must submit an application to the
1593	1593	commission by the date established by the commission.
1594	1594	(c) An application may not be considered filed for purposes
1595	1595	of this chapter that does not include the information prescribed by
1596	1596	Section 2022.053(b) or that is not accompanied by the prescribed
1597	1597	application fee.
1598	1598	Sec. 2022.055. CASINO LICENSE AWARD CONSIDERATIONS. (a)
1599	1599	The commission shall determine the initial and continuing
1600	1600	suitability of each applicant for or holder of a casino owner's
1601	1601	license based on suitability criteria the commission adopts to
1602	1602	ensure that all casino owner's license holders are of good
1603	1603	character, honesty, integrity, and financial stability, that a
1604	1604	casino owner's license holder has sufficient business probity,
1605	1605	competence, and experience in gaming, and that a casino owner's
1606	1606	license holder is otherwise qualified to be licensed.
1607	1607	(b) The commission shall give due consideration to the
1608	1608	protection of the public health, safety, morals, and general
1609	1609	welfare of the people of this state and for the reputation of the
1610	1610	state's gaming industry.
1611	1611	(c) The burden of proving suitability to receive or hold a
1612	1612	casino owner's license is on the applicant or license holder.
1613	1613	(d) In considering the initial and continuing suitability
1614	1614	of an applicant for or holder of a casino owner's license, the
1615	1615	commission may consider the suitability of:
1616	1616	(1) each person holding an equity interest or creditor
1617	1617	interest in the applicant or holder;
1618	1618	(2) each person holding, or proposed to receive, a
1619	1619	casino operator's license, occupational license, or manufacturer's
1620	1620	license employed by or doing business with the applicant or holder;
1621	1621	and
1622	1622	(3) each affiliate of the applicant or holder.
1623	1623	(e) An applicant for or holder of a casino owner's license
1624	1624	may not receive or hold a casino owner's license if the person:
1625	1625	(1) has been convicted of a felony in the past 20 years
1626	1626	under the laws of this state, any other state, or the United States;
1627	1627	(2) has ever been convicted of a gambling or gaming
1628	1628	violation under the laws of this state or any other state;
1629	1629	(3) has ever knowingly or intentionally submitted an
1630	1630	application for a license under this chapter that contained false
1631	1631	information;
1632	1632	(4) served as a principal manager for a person
1633	1633	described by Subdivision (1), (2), or (3);
1634	1634	(5) retains or employs another person described by
1635	1635	Subdivision (2) or (3);
1636	1636	(6) beneficially owns any material equity interest or
1637	1637	creditor interest in the applicant or holder and is a person
1638	1638	described by Subdivision (1), (2), or (3);
1639	1639	(7) holds a manufacturer's license or casino service
1640	1640	license;
1641	1641	(8) is a member of the commission; or
1642	1642	(9) is a member of the judiciary or an elected official
1643	1643	of this state.
1644	1644	(f) The commission may adopt rules providing for a person's
1645	1645	reciprocal determination of suitability to hold a casino owner's
1646	1646	license based on a determination of suitability to own and operate a
1647	1647	casino in any other jurisdiction the commission considers
1648	1648	reasonable in light of the purpose of this chapter.
1649	1649	Sec. 2022.056. ECONOMIC IMPACT ANALYSIS. (a) In
1650	1650	determining whether or, in the case of multiple applicants
1651	1651	competing for a limited number of casino owner's licenses within a
1652	1652	county, to whom to grant a casino owner's license, the commission
1653	1653	shall consider the following factors:
1654	1654	(1) the relative prospective revenues to be collected
1655	1655	by the state from the conduct of gaming at the casino and the
1656	1656	overall economic impact of each competing applicant's proposed
1657	1657	casino and associated facilities;
1658	1658	(2) the relative number of residents of this state who
1659	1659	would be employed in an applicant's proposed casino and any
1660	1660	proposed associated hotel and nongaming businesses and the relative
1661	1661	extent of the applicant's good faith plan to recruit, train, and
1662	1662	promote a workforce that reflects the diverse populations of this
1663	1663	state in all employment classifications;
1664	1664	(3) the relative extent to which an applicant's
1665	1665	proposed casino and any proposed associated hotel and nongaming
1666	1666	businesses could be reasonably expected to encourage interstate
1667	1667	tourism to this state;
1668	1668	(4) the relative extent to which the scope, design,
1669	1669	location, and construction of the applicant's casino and any
1670	1670	associated hotel and nongaming businesses could be reasonably
1671	1671	expected to contribute to developing a first-class gaming industry
1672	1672	in this state;
1673	1673	(5) the applicant's experience in conducting licensed
1674	1674	gaming operations and the applicant's financial ability to promptly
1675	1675	construct and adequately maintain the casino sought to be licensed,
1676	1676	including the experience of partners of the applicant, of
1677	1677	affiliated companies of the applicant or its partners, of key
1678	1678	personnel of the applicant or its partners, and of operating
1679	1679	companies under contract with the applicant; and
1680	1680	(6) the percentage of equity interest in the applicant
1681	1681	owned or to be owned by residents of this state.
1682	1682	(b) To ensure that a requisite level of economic development
1683	1683	benefiting the people of this state accompanies each casino for
1684	1684	which a casino owner's license is granted, the commission shall
1685	1685	require an applicant, as a condition to receiving and holding a
1686	1686	casino owner's license, to commit to building a casino project that
1687	1687	meets the requirements for a casino-anchored destination
1688	1688	attraction development project established under Section 47a(g),
1689	1689	Article III, Texas Constitution.
1690	1690	Sec. 2022.057. REVIEW OF APPLICATION. (a) The commission
1691	1691	shall issue an order approving or denying an application for a
1692	1692	casino owner's license not more than six months after the date of
1693	1693	the filing of the application.
1694	1694	(b) The commission may adopt rules for awarding temporary or
1695	1695	interim licensing the commission finds necessary to administer this
1696	1696	chapter.
1697	1697	Sec. 2022.058. TRANSFERABILITY. A casino owner's license
1698	1698	is not transferable and applies only to the specific site
1699	1699	identified in the license.
1700	1700	Sec. 2022.059. DENIAL AND REVOCATION. (a) The commission
1701	1701	may deny an application or revoke a casino owner's license for a
1702	1702	reasonable cause.
1703	1703	(b) If the commission determines it has reasonable grounds
1704	1704	to believe that a casino owner's license holder may be unsuitable to
1705	1705	continue to hold a casino owner's license, the commission shall
1706	1706	conduct an investigation and hearing under Section 2022.401 and
1707	1707	may, based on its determination, suspend, limit, or revoke the
1708	1708	license. On suspension or revocation of a casino owner's license,
1709	1709	the license holder must immediately cease all gaming.
1710	1710	(c) If the holder of a casino owner's license fails to begin
1711	1711	construction of a casino within 18 months after the receipt of the
1712	1712	casino owner's license, or fails to begin gaming operations within
1713	1713	three years after the receipt of the license, the license is
1714	1714	forfeited, unless the commission, for good cause, has previously
1715	1715	granted an appropriate extension of time.
1716	1716	(d) The right to receive and hold a casino owner's license
1717	1717	is a revocable privilege, and not a right or property under the
1718	1718	United States Constitution or the Texas Constitution. An applicant
1719	1719	for or holder of a casino owner's license does not have a vested
1720	1720	interest or right in a license granted under this chapter.
1721	1721	Sec. 2022.060. REGISTRATION OF INTEREST IN LICENSE. (a)
1722	1722	Except as provided by Subsection (b), a person who directly or
1723	1723	indirectly owns an equity or creditor interest in an applicant for
1724	1724	or holder of a casino owner's license shall register and qualify
1725	1725	with the commission under commission rules and shall provide
1726	1726	information the commission finds necessary to determine the
1727	1727	suitability and eligibility of the person to retain the interest.
1728	1728	(b) The following persons are not required to register or
1729	1729	qualify under this section:
1730	1730	(1) a key employee of the casino owner's license holder
1731	1731	that is required to apply for an occupational license under Section
1732	1732	2022.102;
1733	1733	(2) an institutional investor;
1734	1734	(3) a person that beneficially owns 10 percent or less
1735	1735	of the total equity or creditor interest of the casino owner's
1736	1736	license holder; and
1737	1737	(4) any other group or class of persons that the
1738	1738	commission by rule exempts from registration or qualification.
1739	1739	(c) A casino owner's license holder shall provide to the
1740	1740	commission the name, address, and interest in the casino owner's
1741	1741	license holder of each person who is exempt from registration or
1742	1742	qualification under Subsection (b).
1743	1743	(d) A registration filed under this section must be
1744	1744	accompanied by the application fee set out in Section 2022.252.
1745	1745	Sec. 2022.061. TRANSFERABILITY OF INTEREST. (a) Except as
1746	1746	provided by this subsection, a casino owner's license holder may
1747	1747	not issue an equity or creditor interest to a person without the
1748	1748	commission's determination of the qualification of the proposed
1749	1749	subscriber or purchaser to hold the interest. A casino owner's
1750	1750	license holder that is a publicly held company may issue equity or
1751	1751	creditor interests of five percent or less of its equity or creditor
1752	1752	interest to any person without the consent of the commission.
1753	1753	(b) A person beneficially owning more than five percent of
1754	1754	the equity or creditor interest of a casino owner's license holder
1755	1755	may not transfer any portion of the interest in the license holder
1756	1756	to any person without the commission's determination of the
1757	1757	qualification of the proposed transferee to hold the interest.
1758	1758	(c) A subscriber or proposed transferee of an interest by a
1759	1759	casino owner's license holder shall provide the commission with
1760	1760	information the commission considers necessary to determine the
1761	1761	qualification of the person. The commission, not later than 60 days
1762	1762	after the date of the application, shall determine the
1763	1763	qualification of a subscriber or proposed transferee and approve or
1764	1764	deny the issuance or transfer.
1765	1765	Sec. 2022.062. DETERMINATION OF QUALIFICATION. (a) The
1766	1766	commission shall determine the qualification of a person to acquire
1767	1767	or continue to hold an equity or creditor interest in an applicant
1768	1768	for or holder of a casino owner's license based on the qualification
1769	1769	requirements the commission adopts for the protection of the public
1770	1770	interest to ensure that the persons holding securities issued by
1771	1771	license holders are of good character, honesty, integrity, and
1772	1772	financial stability, and are otherwise qualified to hold the
1773	1773	interest.
1774	1774	(b) The burden of proving qualification to acquire or hold
1775	1775	an equity or creditor interest in a license holder is on the person
1776	1776	acquiring or holding the interest.
1777	1777	(c) A person is unsuitable to acquire or retain an equity or
1778	1778	creditor interest in an applicant for or holder of a casino owner's
1779	1779	license if the person would be unsuitable to receive a casino
1780	1780	owner's license under Section 2022.055(e).
1781	1781	(d) If the commission has reasonable grounds to believe that
1782	1782	a person holding an equity or creditor interest in an applicant for
1783	1783	or holder of a casino owner's license may be unqualified to retain
1784	1784	the person's interest, the commission shall conduct an
1785	1785	investigation and hearing under Section 2022.401 and may, based on
1786	1786	its determination, issue an unsuitability finding and divestiture
1787	1787	order to the holder of the interest and the issuer of the interest.
1788	1788	On receipt of a divestiture order, the person holding the interest
1789	1789	shall tender its entire interest for purchase to the issuer or a
1790	1790	third party on terms the commission approves.
1791	1791	(e) If the commission issues an unsuitability finding and
1792	1792	divestiture order to a holder of an equity interest or creditor
1793	1793	interest, the person subject to the order may not:
1794	1794	(1) receive, directly or indirectly, a dividend,
1795	1795	interest, payment, or distribution of any kind relating to the
1796	1796	security that is the subject of the order; or
1797	1797	(2) exercise, directly or indirectly, any voting power
1798	1798	or other right with respect to the security to which the order
1799	1799	relates.
1800	1800	(f) A person subject to an order may receive payment for the
1801	1801	sale of the person's interest on terms the commission approves.
1802	1802	Sec. 2022.063. TEXAS ENTERPRISE FUND GRANT. A casino owner
1803	1803	is eligible to apply for and receive a grant from the Texas
1804	1804	Enterprise Fund under Section 481.078, Government Code.
1805	1805	[Sections 2022.064-2022.100 reserved for expansion]
1806	1806	SUBCHAPTER C. CASINO OPERATOR'S LICENSE AND OCCUPATIONAL LICENSE
1807	1807	Sec. 2022.101. CASINO OPERATOR'S LICENSE. (a) A person may
1808	1808	not provide services as a casino operator without holding a casino
1809	1809	operator's license.
1810	1810	(b) A casino operator must hold a separate casino operator's
1811	1811	license for each casino that the casino operator operates unless
1812	1812	the operator is also the owner of the premises and holds a casino
1813	1813	owner's license for the premises.
1814	1814	Sec. 2022.102. OCCUPATIONAL LICENSE. (a) A person may not
1815	1815	be employed as a gaming employee without holding an occupational
1816	1816	license.
1817	1817	(b) The holder of an owner's license or operator's license
1818	1818	is not required to obtain an occupational license to provide
1819	1819	services as a gaming employee in the casino or slot establishment to
1820	1820	which the license relates.
1821	1821	(c) A casino or slot establishment owner must at all times
1822	1822	have not less than one occupational license holder designated as a
1823	1823	key employee having responsibility over all gaming activities who
1824	1824	shall be available at the casino or slot establishment at all times
1825	1825	when gaming is conducted on the owner's license holder's premises.
1826	1826	(d) A gaming employee designated or determined to be a key
1827	1827	employee by the commission shall be issued an occupational license
1828	1828	designated as a key employee occupational license. In determining
1829	1829	whether an employee is a key employee, the commission is not
1830	1830	restricted by the title of the job performed by the employee but may
1831	1831	consider the functions and responsibilities of the employee in
1832	1832	making decisions.
1833	1833	(e) A person employed in the field of gaming as a gaming
1834	1834	employee shall obtain an occupational license designated as a
1835	1835	support occupational license. A person required to hold a support
1836	1836	occupational license may not be a gaming employee of or assist the
1837	1837	casino owner's or operator's license holder until the employee
1838	1838	obtains a support occupational license. A person licensed as a key
1839	1839	employee is not required to obtain a support occupational license.
1840	1840	Sec. 2022.103. APPLICATION. (a) An application for a
1841	1841	casino operator's license or an occupational license shall be made
1842	1842	in compliance with commission rules and must contain information
1843	1843	the commission finds necessary to determine the suitability and
1844	1844	eligibility of the applicant to function as a casino operator or to
1845	1845	be employed or retained as a gaming employee.
1846	1846	(b) An application for a casino operator's license or an
1847	1847	occupational license must be accompanied by the required
1848	1848	application fee.
1849	1849	(c) The commission may issue a temporary casino operator's
1850	1850	license and a temporary occupational license.
1851	1851	Sec. 2022.104. RESIDENCY. A person is eligible to apply for
1852	1852	and hold a casino operator's license or occupational license
1853	1853	without regard to the residency of the applicant.
1854	1854	Sec. 2022.105. DETERMINATION OF SUITABILITY. (a) The
1855	1855	commission shall determine the suitability of an applicant for or
1856	1856	holder of a casino operator's license or occupational license based
1857	1857	on suitability criteria the commission adopts in order to ensure
1858	1858	that a license holder:
1859	1859	(1) is of good character, honesty, and integrity;
1860	1860	(2) has sufficient business probity, competence, and
1861	1861	training or experience in the gaming industry to perform the
1862	1862	function contemplated; and
1863	1863	(3) is otherwise qualified to be licensed.
1864	1864	(b) The burden of proving suitability to receive and hold a
1865	1865	casino operator's license or occupational license is on the
1866	1866	applicant or license holder.
1867	1867	(c) In considering the suitability of a company applying for
1868	1868	or holding a casino operator's license or occupational license to
1869	1869	receive and continue to hold the license, the commission shall
1870	1870	consider the suitability of each principal manager and each holder
1871	1871	of an equity interest and creditor interest of the company to
1872	1872	individually receive and hold an occupational license based on the
1873	1873	suitability standards that apply to the applicants for the license
1874	1874	generally.
1875	1875	(d) A person may not be found suitable to receive or hold a
1876	1876	casino operator's license or occupational license if that person
1877	1877	would be found unsuitable to hold a casino owner's license under
1878	1878	Section 2022.055(e), except that an applicant for a casino
1879	1879	operator's license or occupational license who has been convicted
1880	1880	of a felony may be found suitable if the person is found to be
1881	1881	adequately rehabilitated under the rehabilitation requirements
1882	1882	adopted by the commission, and the applicant or license holder is
1883	1883	otherwise suitable for licensing.
1884	1884	Sec. 2022.106. DENIAL OR REVOCATION OF LICENSE. (a) The
1885	1885	commission may deny an application for or revoke a casino
1886	1886	operator's license or occupational license for any reasonable
1887	1887	cause.
1888	1888	(b) If the commission determines that it has reasonable
1889	1889	grounds to believe that a license holder may be unsuitable to
1890	1890	continue to hold the license, giving due consideration to the
1891	1891	protection of the health, safety, morals, and general welfare of
1892	1892	this state and to the reputation of the state's gaming industry, the
1893	1893	commission shall conduct an investigation and hearing provided in
1894	1894	Section 2022.401 and may, based on its determination, suspend,
1895	1895	limit, or revoke any license.
1896	1896	(c) On the suspension or revocation of a license, the
1897	1897	license holder shall cease the provision of all services in any
1898	1898	capacity requiring a license under Section 2022.101 or 2022.102.
1899	1899	(d) A holder of an occupational license that has been
1900	1900	revoked or suspended may not:
1901	1901	(1) receive, directly or indirectly, any
1902	1902	compensation, consideration, or payment of any kind relating to the
1903	1903	conduct of gaming in any capacity requiring a license under Section
1904	1904	2022.101 or 2022.102, other than the payment for services rendered
1905	1905	before the suspension or revocation; or
1906	1906	(2) serve or function in a capacity that would require
1907	1907	a license under Section 2022.101 or 2022.102.
1908	1908	(e) The receipt and holding of a license is a privilege and
1909	1909	is not a right or property under the United States Constitution or
1910	1910	the Texas Constitution. An applicant for or holder of a casino
1911	1911	operator's license or occupational license does not have a vested
1912	1912	interest or right in a license granted under this chapter.
1913	1913	[Sections 2022.107-2022.150 reserved for expansion]
1914	1914	SUBCHAPTER D. MANUFACTURER'S AND OTHER SERVICE PROVIDERS' LICENSES
1915	1915	Sec. 2022.151. MANUFACTURER'S LICENSE. (a) A person may
1916	1916	not engage in any segment of the slot machine manufacturing
1917	1917	industry in this state for which a manufacturer's license is
1918	1918	required under this section without obtaining a manufacturer's
1919	1919	license covering that segment of the industry.
1920	1920	(b) The commission shall adopt rules identifying segments
1921	1921	of the manufacturing industry directly involved in the design,
1922	1922	manufacture, assembly, production, programming, sale, lease,
1923	1923	marketing, distribution, repair, or modification of slot machines
1924	1924	or component parts of slot machines that the commission finds
1925	1925	appropriate for licensing under this section.
1926	1926	(c) A manufacturer's license is personal to the license
1927	1927	holder and allows the license holder to conduct business with any
1928	1928	casino or slot establishment.
1929	1929	Sec. 2022.152. CASINO SERVICE LICENSE. (a) A person may
1930	1930	not engage in any segment of the casino service industry that
1931	1931	requires a license without obtaining a casino service license.
1932	1932	(b) The commission shall adopt rules identifying segments
1933	1933	of the casino service industry directly involved with providing
1934	1934	gaming-related services, equipment, and supplies that the
1935	1935	commission finds appropriate for licensing.
1936	1936	(c) A person is required to obtain a casino service license
1937	1937	if the person:
1938	1938	(1) operates, conducts, or maintains a gaming-related
1939	1939	business in a casino or slot establishment; or
1940	1940	(2) furnishes goods, property, or services to a casino
1941	1941	or slot establishment in exchange for:
1942	1942	(A) a payment based on a percentage of the
1943	1943	earnings, profits, or receipts from the casino or slot
1944	1944	establishment; or
1945	1945	(B) a payment the commission finds to be grossly
1946	1946	disproportionate to the value of the goods, property, or service
1947	1947	provided.
1948	1948	(d) A utility company, a municipality, or another political
1949	1949	subdivision is not required to obtain a casino service license
1950	1950	under this section.
1951	1951	(e) A casino service license is personal to the license
1952	1952	holder and allows the license holder to conduct business with any
1953	1953	casino or slot establishment.
1954	1954	Sec. 2022.153. APPLICATION. (a) Application for a
1955	1955	manufacturer's license or casino service license shall be made in
1956	1956	compliance with commission rules and shall contain information the
1957	1957	commission finds necessary to determine the suitability and
1958	1958	eligibility of the applicant.
1959	1959	(b) An application for a manufacturer's license or casino
1960	1960	service license must be accompanied by the required application
1961	1961	fee.
1962	1962	Sec. 2022.154. DETERMINATION OF SUITABILITY. (a) In
1963	1963	considering the suitability of a company applying for or holding a
1964	1964	manufacturer's license or casino service license to receive and
1965	1965	continue to hold the license, the commission shall consider the
1966	1966	suitability of each principal manager and each holder of an equity
1967	1967	interest and creditor interest in the company applicant to
1968	1968	individually receive and hold a manufacturer's license or casino
1969	1969	service license based on the suitability standards that apply to
1970	1970	the company applicant. A person may not be found suitable to
1971	1971	receive or hold a manufacturer's license or casino service license
1972	1972	if that person would be found unsuitable to hold a casino owner's
1973	1973	license under Section 2022.055(e).
1974	1974	(b) If the commission determines that it has reasonable
1975	1975	grounds to believe that a license holder is unsuitable to hold a
1976	1976	manufacturer's license or casino service license, the commission
1977	1977	shall conduct an investigation and hearing under Section 2022.401
1978	1978	and may, based on its determination, suspend, limit, or revoke a
1979	1979	license.
1980	1980	(c) On suspension or revocation of a license, the license
1981	1981	holder must cease the performance of manufacturing activity or
1982	1982	casino service requiring a license under this chapter. After the
1983	1983	revocation or suspension of the license, the affected license
1984	1984	holder may not receive, directly or indirectly, compensation,
1985	1985	consideration, or payment of any kind relating to manufacturing
1986	1986	activity or provision of casino services in any capacity requiring
1987	1987	a license under this chapter, other than the payment for goods or
1988	1988	services provided before the suspension or revocation.
1989	1989	(d) An owner or casino operator who has entered into a lease
1990	1990	with a manufacturer license holder or casino services license
1991	1991	holder whose license has been revoked or suspended may continue to
1992	1992	make payments on the lease based upon its original terms and
1993	1993	conditions without modification or may accelerate the lease and pay
1994	1994	it off, at the sole option of the owner or operator.
1995	1995	(e) The burden of proving suitability to receive and hold a
1996	1996	manufacturer's license or casino service license is on the license
1997	1997	holder.
1998	1998	[Sections 2022.155-2022.200 reserved for expansion]
1999	1999	SUBCHAPTER E. SLOT ESTABLISHMENT LICENSES
2000	2000	Sec. 2022.201. SLOT ESTABLISHMENT OWNER'S OR OPERATOR'S
2001	2001	LICENSE REQUIRED. Except as otherwise provided by this chapter,
2002	2002	Chapter 2023, or a gaming agreement, a person may not own or operate
2003	2003	a slot machine if the person does not satisfy the requirements of
2004	2004	this chapter and is not licensed by the commission to act as a slot
2005	2005	establishment owner or operator. This section does not prohibit
2006	2006	the operation of slot machines by the owner or operator of a casino
2007	2007	licensed under this chapter.
2008	2008	Sec. 2022.202. APPLICATION AND QUALIFICATION. (a) An
2009	2009	applicant for a slot establishment owner's or operator's license
2010	2010	must apply to the commission under rules adopted by the commission,
2011	2011	provide the information necessary to determine the applicant's
2012	2012	eligibility for a license, and provide other information considered
2013	2013	necessary by the commission.
2014	2014	(b) Except as provided by other law, an applicant for a slot
2015	2015	establishment owner's license must hold a pari-mutuel license
2016	2016	granted under the Texas Racing Act (Article 179e, Vernon's Texas
2017	2017	Civil Statutes) and operate a racetrack.
2018	2018	(c) An applicant for a slot establishment operator's
2019	2019	license must have a valid and executed contract with a racetrack
2020	2020	that satisfies the requirements of Subsection (b) to act as a slot
2021	2021	establishment operator for the racetrack subject to licensing under
2022	2022	this chapter.
2023	2023	(d) Each officer, partner, director, key employee, equity
2024	2024	interest holder, and gaming employee of slot establishment
2025	2025	operations must be eligible and maintain eligibility in accordance
2026	2026	with this chapter to be involved in gaming in this state under this
2027	2027	subchapter.
2028	2028	(e) An applicant for a slot establishment owner's or
2029	2029	operator's license has the burden of proving qualification for a
2030	2030	license by clear and convincing evidence. In addition to
2031	2031	satisfying minimum requirements established by commission rules,
2032	2032	an applicant for a slot establishment owner's or operator's license
2033	2033	must:
2034	2034	(1) be a person of good character, honesty, and
2035	2035	integrity;
2036	2036	(2) be a person whose background and prior activities,
2037	2037	including criminal record, reputation, habits, and associations,
2038	2038	do not pose a threat to the security and integrity of gaming or to
2039	2039	the public interest of this state or to the effective operation and
2040	2040	control of gaming, or do not create or enhance the dangers of
2041	2041	unsuitable, unfair, or illegal practices, methods, and activities
2042	2042	in the conduct of gaming or in the carrying on of the business and
2043	2043	financial arrangements incidental to gaming;
2044	2044	(3) if applying for a new license, provide
2045	2045	fingerprints for a criminal records evaluation by the Department of
2046	2046	Public Safety or other law enforcement agency, including
2047	2047	fingerprints for each person required to be named in an
2048	2048	application, accompanied by a signed authorization for the release
2049	2049	of information to the commission by the department and the Federal
2050	2050	Bureau of Investigation;
2051	2051	(4) not have been convicted of an offense under this
2052	2052	chapter or of any crime related to theft, bribery, gambling, or
2053	2053	involving moral turpitude;
2054	2054	(5) demonstrate adequate financing for the operation
2055	2055	of the facility at which the slot machines will be operated from a
2056	2056	source that meets the requirements of this chapter and is adequate
2057	2057	to support the successful performance of the duties and
2058	2058	responsibilities of the license holder and disclose all financing
2059	2059	or refinancing arrangements for the purchase, lease, or other
2060	2060	acquisition of gaming equipment in the degree of detail requested
2061	2061	by the commission;
2062	2062	(6) when applying for a new license or renewing a
2063	2063	license under this chapter, present evidence to the commission of
2064	2064	the existence and terms of any agreement regarding the proceeds
2065	2065	from the operation of slot machines;
2066	2066	(7) demonstrate that each equity interest holder in
2067	2067	the applicant meets all applicable qualifications under this
2068	2068	chapter;
2069	2069	(8) provide all information, including financial data
2070	2070	and documents, consents, waivers, and any other materials,
2071	2071	requested by the commission for purposes of determining
2072	2072	qualifications for a license; and
2073	2073	(9) as part of its application, expressly waive any
2074	2074	and all claims against the commission, this state, and a member,
2075	2075	officer, employee, or authorized agent of the commission or this
2076	2076	state for damages resulting from any background investigation,
2077	2077	disclosure, or publication relating to an application for a slot
2078	2078	establishment owner's or operator's license.
2079	2079	(f) An application or disclosure form and any other document
2080	2080	submitted to the commission by or on behalf of the applicant for
2081	2081	purposes of determining qualification for a slot establishment
2082	2082	owner's or operator's license must be sworn to or affirmed before an
2083	2083	officer qualified to administer oaths.
2084	2084	(g) An applicant who knowingly fails to reveal any fact
2085	2085	material to qualification for a license, finding of suitability, or
2086	2086	other approval or who knowingly submits false or misleading
2087	2087	material information is ineligible for a slot establishment owner's
2088	2088	or operator's license.
2089	2089	(h) An applicant for a license or renewal of a license as a
2090	2090	slot establishment owner or operator shall notify the commission of
2091	2091	any change in the application information for a license or renewal
2092	2092	of a license not later than the 10th day after the date of the
2093	2093	change, except that a publicly traded corporation or other business
2094	2094	association or entity applicant is not required to notify the
2095	2095	commission of a transfer by which any person directly or indirectly
2096	2096	becomes the beneficial owner of less than 10 percent of the stock of
2097	2097	the corporation or association.
2098	2098	Sec. 2022.203. SLOT ESTABLISHMENT OWNER OR OPERATOR:
2099	2099	EMPLOYEE INFORMATION. (a) A slot establishment owner or operator
2100	2100	shall provide to the commission the name and address of the
2101	2101	providers of surety and insurance required under this chapter.
2102	2102	(b) Not later than the 10th day following the date of the
2103	2103	change, a license holder must report to the commission any change in
2104	2104	an officer, partner, director, key employee, equity interest
2105	2105	holder, gaming employee, or owner and any change in a surety or
2106	2106	insurance provider.
2107	2107	Sec. 2022.204. SLOT ESTABLISHMENT: REQUIREMENTS; LOCATION.
2108	2108	(a) A slot establishment owner or operator may not operate slot
2109	2109	machines at any place that is not licensed as a slot establishment.
2110	2110	(b) The commission by rule shall establish standards for
2111	2111	slot establishments to ensure that establishments are accessible,
2112	2112	safe, comfortable, durable, and of sufficiently high-quality
2113	2113	construction to promote investments in establishments and related
2114	2114	facilities that foster lasting economic development and continuity
2115	2115	in producing state revenue, and that protect the health and welfare
2116	2116	of employees, patrons, and all state residents. The standards must
2117	2117	include or incorporate high-quality commercial building standards,
2118	2118	including safety, air-conditioning, heating, and electrical
2119	2119	standards.
2120	2120	(c) An applicant for a slot establishment license must:
2121	2121	(1) consent to the application of state laws with
2122	2122	exclusive venue in Travis County, Texas, related to any action
2123	2123	arising out of the operation of slot machines;
2124	2124	(2) provide office space for at least one commission
2125	2125	employee as required by commission rule; and
2126	2126	(3) provide free and unrestricted access to the
2127	2127	establishment by the commission.
2128	2128	(d) An applicant for a slot establishment license must
2129	2129	provide the maps, surveys, site plans, architectural plans, and
2130	2130	financial statements required by the commission and update the
2131	2131	information at least annually if required by the commission.
2132	2132	(e) The commission may not deny, suspend, or revoke a
2133	2133	license under this chapter based on the fact that a slot
2134	2134	establishment or a proposed slot establishment is a location for
2135	2135	which a person holds a wine and beer retailer's permit, mixed
2136	2136	beverage permit, mixed beverage late hours permit, private club
2137	2137	registration permit, or private club late hours permit, issued
2138	2138	under Chapter 25, 28, 29, 32, or 33, Alcoholic Beverage Code.
2139	2139	(f) The commission may not issue a slot establishment
2140	2140	license to a racetrack if:
2141	2141	(1) as of January 1, 2009, any part of the real
2142	2142	property on which the licensed premises of the racetrack is located
2143	2143	is less than one-half mile from any part of the real property on
2144	2144	which a public school is located; or
2145	2145	(2) the racetrack has held an inactive racing license
2146	2146	for at least two of the three years preceding the date the
2147	2147	application is submitted.
2148	2148	(g) A slot establishment license is valid only on the
2149	2149	premises of the location for which the license is issued. The
2150	2150	location for a licensed slot establishment may not be moved or
2151	2151	transferred under the license issued, and the license may not be
2152	2152	amended to provide a different location for the slot establishment
2153	2153	even if the racetrack location is moved or transferred to a
2154	2154	different location. A slot establishment license is void if the
2155	2155	location of the racetrack to which the slot establishment owner's
2156	2156	pari-mutuel license applies is moved.
2157	2157	Sec. 2022.205. SUMMARY SUSPENSION OF SLOT ESTABLISHMENT
2158	2158	OWNER'S OR OPERATOR'S LICENSE. The commission may summarily
2159	2159	suspend the license of a slot establishment owner or operator
2160	2160	without notice or hearing if the commission finds the action is
2161	2161	necessary to maintain the integrity, security, honesty, or fairness
2162	2162	of the operation or administration of gaming or to prevent
2163	2163	financial loss to this state and:
2164	2164	(1) the license holder fails to deposit money received
2165	2165	from slot machine operations as required by this chapter or
2166	2166	commission rule;
2167	2167	(2) an event occurs that would render the license
2168	2168	holder ineligible for a license under this chapter;
2169	2169	(3) the license holder refuses to allow the
2170	2170	commission, the commission's agents, or the state auditor, or their
2171	2171	designees, to examine the license holder's books, records, papers,
2172	2172	or other objects; or
2173	2173	(4) the executive director learns the license holder
2174	2174	failed to disclose information that would, if disclosed, render the
2175	2175	owner or operator ineligible for a license under this chapter.
2176	2176	Sec. 2022.206. CAPITAL INVESTMENTS AND IMPROVEMENT
2177	2177	REQUIREMENTS FOR SLOT ESTABLISHMENT. (a) A slot establishment
2178	2178	owner or operator shall provide all necessary capital investments
2179	2179	and required improvements at a slot establishment owned or operated
2180	2180	by the owner or operator.
2181	2181	(b) The commission may not issue a license for the operation
2182	2182	of a slot establishment at a class 2 racetrack that has not made at
2183	2183	least $40 million in capital investments or improvements to new or
2184	2184	existing facilities at the racetrack.
2185	2185	[Sections 2022.207-2022.250 reserved for expansion]
2186	2186	SUBCHAPTER F. LICENSE RENEWAL AND FEES
2187	2187	Sec. 2022.251. TERMS; RENEWAL. (a) An original or renewal
2188	2188	license expires on the first anniversary of the date it is issued.
2189	2189	(b) The fee for an owner's license, operator's license,
2190	2190	occupational license, manufacturer's license, or casino service
2191	2191	license is in the amount established by Section 2022.253 and must be
2192	2192	paid annually. A license holder may renew an unexpired license
2193	2193	annually by meeting the licensing requirements of the commission
2194	2194	and by paying the annual fee.
2195	2195	Sec. 2022.252. APPLICATION FEES. (a) An application fee
2196	2196	received under this section shall be:
2197	2197	(1) deposited in the Texas casino and slot gaming
2198	2198	fund; and
2199	2199	(2) used for the operation of the commission.
2200	2200	(b) An applicant for a casino owner's license must pay an
2201	2201	application fee of $100,000.
2202	2202	(c) An applicant for a slot establishment owner's license
2203	2203	must pay an application fee of $50,000.
2204	2204	(d) An applicant for a manufacturer's license must pay an
2205	2205	application fee of $200,000.
2206	2206	(e) An applicant for an operator's license must pay an
2207	2207	application fee of $50,000.
2208	2208	(f) An applicant for a casino service license must pay an
2209	2209	application fee of $100.
2210	2210	(g) A person registering and applying to qualify to hold an
2211	2211	equity interest or creditor interest in a license holder must pay an
2212	2212	application fee of $100.
2213	2213	(h) An individual applying for an occupational license must
2214	2214	pay an application fee of $100.
2215	2215	(i) All application fees must be in the form of a money order
2216	2216	or cashier's check and be payable to the Texas Gaming Commission,
2217	2217	except that the commission may provide for the payment of the fees
2218	2218	by electronic funds transfer or similar method. Application fees
2219	2219	are nonrefundable.
2220	2220	(j) Application fees shall be applied toward the cost of
2221	2221	investigating applicants' suitability for licensing or
2222	2222	qualification under this chapter. Any costs of investigation
2223	2223	incurred in excess of the application fee shall be paid by the
2224	2224	applicant.
2225	2225	Sec. 2022.253. LICENSE FEES. (a) A holder of a casino
2226	2226	owner's license must pay an annual license fee of $100,000.
2227	2227	(b) A holder of a slot establishment owner's license must
2228	2228	pay an annual fee of $50,000.
2229	2229	(c) A holder of a manufacturer's license must pay an annual
2230	2230	license fee of $100,000.
2231	2231	(d) A holder of an operator's license must pay an annual
2232	2232	license fee of $50,000.
2233	2233	(e) A holder of a casino service license must pay an annual
2234	2234	license fee of $100.
2235	2235	(f) A holder of an equity interest or creditor interest in
2236	2236	any license holder that is required to qualify with the commission
2237	2237	must pay an annual fee of $100.
2238	2238	(g) A holder of an occupational license must pay an annual
2239	2239	license fee of $100.
2240	2240	[Sections 2022.254-2022.300 reserved for expansion]
2241	2241	SUBCHAPTER G. CASINO AND SLOT GAMING FUND; TAXES ON GROSS GAMING
2242	2242	REVENUE AND NET SLOT INCOME
2243	2243	Sec. 2022.301. TEXAS CASINO AND SLOT GAMING FUND. (a) The
2244	2244	Texas casino and slot gaming fund is a special fund in the state
2245	2245	treasury.
2246	2246	(b) All application fees, investigation fees, and license
2247	2247	fees collected by the commission or on the commission's behalf
2248	2248	related to casino and slot gaming shall be deposited to the credit
2249	2249	of the Texas casino and slot gaming fund.
2250	2250	(c) The Texas casino and slot gaming fund may be used only
2251	2251	for the operation of the commission and the administration of this
2252	2252	chapter. If the money in the fund exceeds the amount necessary for
2253	2253	the operation of the commission and the administration of this
2254	2254	chapter, the legislature may transfer any excess amount to a
2255	2255	dedicated account to be known as the higher education trust account
2256	2256	in the general revenue fund to be used solely to provide additional
2257	2257	financial aid to assist in the payment of tuition and fees for
2258	2258	resident students of institutions of higher education in this
2259	2259	state.
2260	2260	(d) The operation of the commission and the administration
2261	2261	of this chapter shall be supported by fees generated under this
2262	2262	chapter and by a portion of the taxes imposed by Section 2022.302.
2263	2263	Sec. 2022.302. CASINO AND SLOT GAMING TAX; ALLOCATION OF
2264	2264	TAX. (a) There is imposed on each holder of a casino owner's
2265	2265	license a gaming tax in an amount equal to 15 percent of the gross
2266	2266	gaming revenue of the casino operated under the license. The tax
2267	2267	shall be computed and paid on a monthly basis in accordance with the
2268	2268	procedures established by commission rule.
2269	2269	(b) There is imposed on each holder of a slot establishment
2270	2270	owner's license a slot gaming tax in an amount equal to 35 percent
2271	2271	of the net slot income of the slot establishment operated under the
2272	2272	license. The tax shall be computed and paid on a monthly basis in
2273	2273	accordance with the procedures established by commission rule.
2274	2274	(c) Except as provided by Subsections (d), (e), and (f), the
2275	2275	revenue from the taxes imposed by this section is allocated to the
2276	2276	higher education trust account in the general revenue fund.
2277	2277	(d) Of the revenue from the tax imposed by Subsection (a):
2278	2278	(1) one-thirtieth of the revenue is allocated to the
2279	2279	municipality in which the casino to which the license relates is
2280	2280	located, and one-thirtieth of the revenue is allocated to the
2281	2281	county in which the casino to which the license relates is located;
2282	2282	or
2283	2283	(2) if the casino is located in an unincorporated
2284	2284	area, one-fifteenth of the revenue is allocated to the county in
2285	2285	which the casino to which the license relates is located.
2286	2286	(e) The comptroller shall transfer the appropriate amount
2287	2287	allocated under Subsection (d) to the appropriate municipalities
2288	2288	and counties not less than monthly in the manner the comptroller
2289	2289	considers appropriate.
2290	2290	(f) Of the revenue from the taxes imposed by this section:
2291	2291	(1) one-tenth of one percent shall be allocated to the
2292	2292	general revenue fund and may be appropriated only to fund a
2293	2293	compulsive gambling program established under Subchapter L; and
2294	2294	(2) $200,000 may be appropriated in each state fiscal
2295	2295	biennium to the Department of Public Safety to be used to provide
2296	2296	grants to prosecuting attorneys for the investigation and
2297	2297	prosecution of offenses related to the possession of gambling
2298	2298	devices.
2299	2299	(g) The taxes imposed by this section are due and payable on
2300	2300	or before the 20th day of the month following the month in which the
2301	2301	taxes are imposed.
2302	2302	(h) If the amount of gaming taxes required to be reported
2303	2303	and paid under this section is later determined to be greater or
2304	2304	less than the amount actually reported and paid by the license
2305	2305	holder, the commission shall:
2306	2306	(1) assess and collect the additional gaming taxes
2307	2307	determined to be due with interest until paid; or
2308	2308	(2) refund any overpayment, with interest, to the
2309	2309	license holder.
2310	2310	(i) Interest must be computed, until paid, at the rate of
2311	2311	one percent per month from the first day of the first month
2312	2312	following either the due date of the additional gaming taxes or the
2313	2313	date of overpayment.
2314	2314	Sec. 2022.303. DETERMINATION OF GROSS GAMING REVENUE. (a)
2315	2315	In calculating gross gaming revenue, a prize, premium, drawing,
2316	2316	benefit, or ticket that is redeemable for money, merchandise, or
2317	2317	other promotional allowance, except money or tokens paid at face
2318	2318	value directly to a patron as the result of a specific wager and the
2319	2319	amount of cash paid to purchase an annuity to fund winnings, may not
2320	2320	be deducted from gross gaming revenue as a loss at any game except a
2321	2321	slot machine.
2322	2322	(b) In calculating gross gaming revenue from slot machines
2323	2323	at a casino, the actual cost to the license holder of any personal
2324	2324	property distributed to a patron as the result of a legitimate wager
2325	2325	may be deducted as a loss, but travel expenses, food, refreshments,
2326	2326	lodging, or services at the license holder's facility may not be
2327	2327	deducted. For the purposes of this subsection, "as the result of a
2328	2328	legitimate wager" means that the patron must make a wager before
2329	2329	receiving the personal property, regardless of whether the receipt
2330	2330	of the personal property is dependent on the outcome of the wager.
2331	2331	(c) Cash or the value of noncash prizes awarded to patrons
2332	2332	in a contest or tournament are not losses for purposes of
2333	2333	determining gross gaming revenue.
2334	2334	Sec. 2022.304. REFUND OF OVERPAYMENT. (a) Taxes imposed
2335	2335	under this subchapter that are erroneously collected may be
2336	2336	refunded, on approval of the commission, as other claims against
2337	2337	the state are paid.
2338	2338	(b) Not later than the 90th day after the date of the mailing
2339	2339	of the notice of the commission's action on a claim for refund filed
2340	2340	under this chapter, the claimant may bring an action against the
2341	2341	commission on the grounds stated in the claim in any court of
2342	2342	competent jurisdiction for the recovery of any part of the amount of
2343	2343	the claim that has been disallowed.
2344	2344	(c) Failure to bring an action within the time specified by
2345	2345	Subsection (b) constitutes a waiver of any demand against the state
2346	2346	on account of alleged overpayments.
2347	2347	(d) If the commission fails to mail its notice of action on a
2348	2348	claim within six months after the date the claim is filed, the
2349	2349	claimant may consider the claim disallowed and bring an action
2350	2350	against the commission on the grounds set forth in the claim for the
2351	2351	recovery of any part of the amount claimed as an overpayment.
2352	2352	(e) In a case where a refund is granted, interest is allowed
2353	2353	at the rates provided in Section 111.064, Tax Code.
2354	2354	(f) A claim for refund of taxes imposed under this
2355	2355	subchapter that are paid in excess of the amount required to be
2356	2356	reported and paid must be filed not later than two years after the
2357	2357	date of overpayment.
2358	2358	Sec. 2022.305. DETERMINATION OF DEFICIENCY. (a) If an
2359	2359	owner's license holder fails to make a report of the taxes imposed
2360	2360	under this subchapter as required by this chapter, or if the
2361	2361	executive director is not satisfied with the owner's license
2362	2362	holder's report of the taxes, the executive director may compute
2363	2363	and determine the amount required to be paid on the basis of:
2364	2364	(1) the facts contained in the report, if any;
2365	2365	(2) an audit conducted by the executive director;
2366	2366	(3) an estimate of the amount of taxes due;
2367	2367	(4) any information in the commission's possession or
2368	2368	that may come in the executive director's possession; or
2369	2369	(5) any combination of the methods described by
2370	2370	Subdivisions (1)-(4).
2371	2371	(b) In making a determination, the commission may offset
2372	2372	overpayments and interest due against underpayments and interest or
2373	2373	penalties due for the period of the audit.
2374	2374	(c) The executive director shall give prompt written notice
2375	2375	of a determination of a deficiency under this section to the owner's
2376	2376	license holder. Except in the case of fraud or intent to evade the
2377	2377	payment of the tax, a notice of a determination of a deficiency must
2378	2378	be mailed not later than two years after the last day of the
2379	2379	calendar month following the applicable reporting period in which
2380	2380	the deficiency occurred or not later than two years after the report
2381	2381	is filed by the owner's license holder, whichever is later.
2382	2382	(d) If the reasons for the deficiency are not apparent, the
2383	2383	executive director shall include an explanation of those reasons in
2384	2384	the notice of a determination of a deficiency.
2385	2385	(e) If overpayments and interest exceed underpayments,
2386	2386	penalties, and interest, the excess amount shall be refunded to the
2387	2387	owner's license holder.
2388	2388	Sec. 2022.306. PETITION FOR REVIEW. (a) An owner's license
2389	2389	holder against whom a determination is made under Section 2022.305
2390	2390	may petition the commission for a redetermination not later than
2391	2391	the 30th day after the date of the service of notice of the
2392	2392	determination. If a petition for redetermination satisfying the
2393	2393	requirements of Subsection (c) is not filed within the 30-day
2394	2394	period, the determination becomes final.
2395	2395	(b) If a petition for redetermination satisfying the
2396	2396	requirements of Subsection (c) is filed within the 30-day period,
2397	2397	the commission shall reconsider the determination and, if the
2398	2398	petitioner requests, shall grant a hearing.
2399	2399	(c) A petition for redetermination must:
2400	2400	(1) specify the contested portions of the
2401	2401	determination of deficiency;
2402	2402	(2) specify the grounds for redetermination;
2403	2403	(3) state whether a hearing is requested; and
2404	2404	(4) be accompanied by payment in full of the
2405	2405	uncontested portion of the determination, including any interest
2406	2406	and penalties.
2407	2407	(d) An order or decision of the commission on a petition for
2408	2408	redetermination is final 10 days after the date of service on the
2409	2409	petitioner.
2410	2410	(e) A petitioner against whom an order or decision of the
2411	2411	commission becomes final may, not later than the 60th day after the
2412	2412	date the decision is final, petition for judicial review in the
2413	2413	manner provided by Chapter 2001, Government Code. The executive
2414	2414	director may not petition for judicial review.
2415	2415	Sec. 2022.307. TAX ADMINISTRATION. (a) The commission
2416	2416	shall perform all functions incident to the administration,
2417	2417	collection, enforcement, and operation of a fee or tax imposed
2418	2418	under this subchapter. The commission may adopt rules and prescribe
2419	2419	forms for the administration, collection, and enforcement of a fee
2420	2420	or tax and for the reporting of a fee or tax.
2421	2421	(b) Except as modified by this chapter, Subtitle B, Title 2,
2422	2422	Tax Code, applies to the administration, collection, and
2423	2423	enforcement of a tax imposed under this subchapter. For purposes of
2424	2424	the application of Subtitle B, Title 2, Tax Code, to a tax imposed
2425	2425	under this subchapter, the powers and duties assigned to the
2426	2426	comptroller under that subtitle are assigned to the commission.
2427	2427	Sec. 2022.308. TAXES DEPOSITED IN STATE HIGHWAY FUND. (a)
2428	2428	Notwithstanding any other law, the comptroller quarterly shall
2429	2429	determine the net amount of receipts collected from a casino or slot
2430	2430	establishment from the taxes imposed under Chapters 151, 152, 156,
2431	2431	171, and 183, Tax Code, and shall deposit that amount in the state
2432	2432	highway fund.
2433	2433	(b) Money deposited in the state highway fund under this
2434	2434	section may be used only for transportation in this state.
2435	2435	[Sections 2022.309-2022.350 reserved for expansion]
2436	2436	SUBCHAPTER H. REGULATION OF CASINO AND SLOT ESTABLISHMENT
2437	2437	OPERATIONS
2438	2438	Sec. 2022.351. REGULATION OF CASINO AND SLOT ESTABLISHMENT
2439	2439	OPERATIONS. (a) The commission shall adopt rules applicable to the
2440	2440	operation of casinos and slot establishments as the commission
2441	2441	finds necessary for the protection of the health, safety, morals,
2442	2442	and general welfare of this state and for the reputation of the
2443	2443	state's gaming industry.
2444	2444	(b) Casinos and slot establishments may operate 24 hours a
2445	2445	day, seven days a week. A license holder may elect other hours of
2446	2446	operation.
2447	2447	(c) The commission may not authorize a casino or slot
2448	2448	establishment to conduct wagering on the outcome of a sports event
2449	2449	or sports activity other than greyhound or horse racing.
2450	2450	Sec. 2022.352. USE OF CHIPS OR TOKENS. All gaming must be
2451	2451	conducted with chips or tokens approved by the commission or with
2452	2452	the legal tender of the United States.
2453	2453	Sec. 2022.353. REPORTING REQUIREMENTS. (a) An owner's
2454	2454	license holder shall keep the license holder's books and records in
2455	2455	a manner that clearly shows the total amount of gross gaming revenue
2456	2456	or net slot income, as applicable, and other revenues received.
2457	2457	(b) The books and records kept by an owner's license holder
2458	2458	relating to gaming operations are not public records and the
2459	2459	publication and dissemination of the materials by the commission is
2460	2460	prohibited. The commission may publish and disseminate gaming
2461	2461	revenues and incomes of each owner's license holder at a frequency
2462	2462	and in the level of detail as it considers appropriate.
2463	2463	(c) An owner's license holder shall file a report of each
2464	2464	change of the corporate officers and directors with the commission.
2465	2465	The commission shall, not later than the 90th day after the date of
2466	2466	the change, approve or disapprove the change. During the 90-day
2467	2467	period, the officer or director is entitled to exercise the powers
2468	2468	of the office to which the officer or director was elected or
2469	2469	appointed.
2470	2470	(d) An owner's license holder shall report to the executive
2471	2471	director in writing a change in company employees who have been
2472	2472	designated as key employees.
2473	2473	(e) The commission may require that a company furnish the
2474	2474	commission with a copy of its federal income tax return not later
2475	2475	than the 30th day after the date the return is filed with the
2476	2476	federal government.
2477	2477	Sec. 2022.354. EXCLUSION OF PERSONS. (a) The commission by
2478	2478	rule shall provide for the establishment of a list of persons who
2479	2479	are to be excluded or ejected from a casino or slot establishment.
2480	2480	The list may include a person whose presence in the casino or
2481	2481	establishment is determined by the commission to pose a threat to
2482	2482	the interests of this state, to licensed gaming, or to both
2483	2483	interests.
2484	2484	(b) In making a determination under this section, the
2485	2485	commission may consider any:
2486	2486	(1) prior conviction of a crime that is a felony in
2487	2487	this state or under the laws of the United States or a crime
2488	2488	involving moral turpitude or a violation of the gaming laws of a
2489	2489	state; or
2490	2490	(2) violation of or conspiracy to violate the
2491	2491	provisions of this chapter relating to:
2492	2492	(A) the failure to disclose an interest in a
2493	2493	casino or slot establishment for which the person must obtain a
2494	2494	license;
2495	2495	(B) willful evasion of a fee or a tax;
2496	2496	(C) notorious or unsavory reputation that would
2497	2497	adversely affect public confidence and trust that the gaming
2498	2498	industry is free from criminal or corruptive elements; or
2499	2499	(D) a written order of a governmental agency that
2500	2500	authorizes the exclusion or ejection of the person from a casino or
2501	2501	slot establishment where gaming or pari-mutuel wagering is
2502	2502	conducted.
2503	2503	Sec. 2022.355. INTERNAL AUDIT AND CONTROL SYSTEMS. (a) An
2504	2504	owner's license holder shall adopt an internal control system that
2505	2505	provides for:
2506	2506	(1) the safeguarding of its assets and revenues,
2507	2507	especially the recording of cash and evidences of indebtedness; and
2508	2508	(2) the provision of reliable records, accounts, and
2509	2509	reports of transactions, operations, and events, including reports
2510	2510	to the executive director and the commission.
2511	2511	(b) The internal control system must be designed to
2512	2512	reasonably ensure that:
2513	2513	(1) assets are safeguarded;
2514	2514	(2) financial records are accurate and reliable;
2515	2515	(3) transactions are performed only in accordance with
2516	2516	management's general or specific authorization;
2517	2517	(4) transactions are recorded adequately to allow
2518	2518	proper reporting of gaming revenue and of fees and taxes and to
2519	2519	maintain accountability for assets;
2520	2520	(5) access to assets is allowed only in accordance
2521	2521	with management's specific authorization;
2522	2522	(6) recorded accountability for assets is compared
2523	2523	with actual assets at reasonable intervals and appropriate action
2524	2524	is taken with respect to any discrepancies; and
2525	2525	(7) functions, duties, and responsibilities are
2526	2526	appropriately segregated and performed in accordance with sound
2527	2527	practices by competent, qualified personnel.
2528	2528	(c) An owner's license holder and an applicant for an
2529	2529	owner's license shall describe, in a manner approved or required by
2530	2530	the executive director, the license holder's or applicant's
2531	2531	administrative and accounting procedures in detail in a written
2532	2532	system of internal control. An owner's license holder and
2533	2533	applicant for an owner's license shall submit a copy of the license
2534	2534	holder's or applicant's written system to the executive director. A
2535	2535	written system must include:
2536	2536	(1) an organizational chart depicting appropriate
2537	2537	segregation of functions and responsibilities;
2538	2538	(2) a description of the duties and responsibilities
2539	2539	of each position shown on the organizational chart;
2540	2540	(3) a detailed, narrative description of the
2541	2541	administrative and accounting procedures designed to satisfy the
2542	2542	requirements of Section 2022.353(a);
2543	2543	(4) a written statement signed by the license holder's
2544	2544	chief financial officer and either the license holder's chief
2545	2545	executive officer or an owner's license holder attesting that the
2546	2546	system satisfies the requirements of this section;
2547	2547	(5) if the written system is submitted by an
2548	2548	applicant, a letter from an independent certified public accountant
2549	2549	stating that the applicant's written system has been reviewed by
2550	2550	the certified public accountant and complies with the requirements
2551	2551	of this section; and
2552	2552	(6) other items the executive director may require.
2553	2553	(d) The commission shall adopt minimum standards for
2554	2554	internal control procedures.
2555	2555	Sec. 2022.356. AGE REQUIREMENTS. A person under the age of
2556	2556	21 years may not:
2557	2557	(1) play, be allowed to play, place wagers, or collect
2558	2558	winnings, personally or through an agent, from any gaming
2559	2559	authorized under this chapter; or
2560	2560	(2) be employed as a gaming employee.
2561	2561	Sec. 2022.357. ACCEPTANCE OF NEGOTIABLE INSTRUMENTS. (a)
2562	2562	A negotiable instrument evidencing a gaming transaction may be
2563	2563	enforced by legal process.
2564	2564	(b) A license holder may accept an incomplete negotiable
2565	2565	instrument that is signed by a patron and states the amount of the
2566	2566	debt. The license holder may complete the instrument as is
2567	2567	necessary for the instrument to be presented for payment.
2568	2568	(c) A license holder:
2569	2569	(1) may not accept a negotiable instrument that is
2570	2570	incomplete, except as authorized by Subsection (b); and
2571	2571	(2) may accept a negotiable instrument that is payable
2572	2572	to an affiliate or may complete a negotiable instrument in the name
2573	2573	of an affiliate as payee if the negotiable instrument otherwise
2574	2574	complies with this section and the records of the affiliate
2575	2575	pertaining to the negotiable instrument are made available to the
2576	2576	executive director on request.
2577	2577	(d) This section does not prohibit the establishment of an
2578	2578	account by a deposit of cash, recognized traveler's check, or any
2579	2579	other instrument that is equivalent to cash.
2580	2580	(e) Any person, license holder, or the agents or employees
2581	2581	of the person or license holder who violate this section are subject
2582	2582	only to the penalties provided in this chapter relating to
2583	2583	disciplinary actions. The failure of a person to comply with this
2584	2584	section or commission rules does not invalidate a negotiable
2585	2585	instrument or affect the ability to enforce the negotiable
2586	2586	instrument or the transaction that the negotiable instrument
2587	2587	represents.
2588	2588	Sec. 2022.358. GAMING DEBTS. (a) Except as otherwise
2589	2589	provided by this chapter, gaming debts not evidenced by a
2590	2590	negotiable instrument are void and unenforceable and do not give
2591	2591	rise to any administrative or civil cause of action.
2592	2592	(b) A claim by a patron of a license holder for payment of a
2593	2593	gaming debt not evidenced by a negotiable instrument may be
2594	2594	resolved by the executive director under commission rules.
2595	2595	(c) The executive director shall send a copy of the
2596	2596	director's ruling by first class mail to the attorneys of record and
2597	2597	shall keep an appropriate copy of the mailing. If a party is not
2598	2598	represented by an attorney of record, the executive director shall
2599	2599	send a copy of the ruling by first class mail to the party and shall
2600	2600	keep an appropriate record of the mailing.
2601	2601	(d) A party or attorney of record notified by mail under
2602	2602	this section is presumed to have been notified on the date on which
2603	2603	the notice is mailed.
2604	2604	(e) A party aggrieved by the executive director's ruling is
2605	2605	entitled to have the claim resolved by the commission in a contested
2606	2606	case if the party files a written complaint with the commission
2607	2607	challenging the executive director's decision not later than the
2608	2608	20th day after the date on which the party or the party's attorney
2609	2609	of record is notified by mail.
2610	2610	Sec. 2022.359. QUESTIONING AND DETENTION OF PERSONS. (a)
2611	2611	An owner's license holder or the license holder's officer,
2612	2612	employee, or agent may question any person on the license holder's
2613	2613	premises suspected of violating this chapter. The owner's license
2614	2614	holder or the license holder's officer, employee, or agent is not
2615	2615	criminally or civilly liable:
2616	2616	(1) as a result of the questioning; or
2617	2617	(2) for reporting the person suspected of the
2618	2618	violation to the executive director or law enforcement authorities.
2619	2619	(b) An owner's license holder or the license holder's
2620	2620	officer, employee, or agent who has reasonable cause to believe
2621	2621	that there has been a violation of this chapter in the license
2622	2622	holder's casino or slot establishment by a person may take that
2623	2623	person into custody and detain the person in the casino or slot
2624	2624	establishment in a reasonable manner and for a reasonable length of
2625	2625	time. The taking into custody and detention does not render the
2626	2626	license holder or the license holder's officer, employee, or agent
2627	2627	criminally or civilly liable unless it is established by clear and
2628	2628	convincing evidence that the taking into custody and detention are
2629	2629	unreasonable under all the circumstances.
2630	2630	(c) An owner's license holder or the license holder's
2631	2631	officer, employee, or agent is not entitled to the immunity from
2632	2632	liability provided by Subsection (a) or (b) unless there is
2633	2633	displayed in a conspicuous place in the license holder's
2634	2634	establishment a notice in bold-faced type, clearly legible, and in
2635	2635	substantially this form:
2636	2636	AN OWNER'S LICENSE HOLDER OR AN OWNER'S LICENSE
2637	2637	HOLDER'S OFFICER, EMPLOYEE, OR AGENT WHO HAS A
2638	2638	REASONABLE CAUSE TO BELIEVE THAT A PERSON HAS VIOLATED
2639	2639	A PROVISION OF CHAPTER 2005, OCCUPATIONS CODE, MAY
2640	2640	QUESTION OR DETAIN THAT PERSON IN THE ESTABLISHMENT.
2641	2641	Sec. 2022.360. SLOT MACHINE DISABLED. (a) The commission
2642	2642	may disable a slot machine operated by a license holder under this
2643	2643	chapter at the time:
2644	2644	(1) a proceeding to summarily suspend the license is
2645	2645	initiated;
2646	2646	(2) the commission discovers the license holder failed
2647	2647	to deposit money received from slot machine operation as required
2648	2648	if the license is being summarily suspended under this section; or
2649	2649	(3) an act or omission occurs that, under commission
2650	2650	rules, justifies the termination of slot machine operations to:
2651	2651	(A) protect the integrity of gaming or the public
2652	2652	health, welfare, or safety; or
2653	2653	(B) prevent financial loss to this state.
2654	2654	(b) The commission shall immediately disable a slot machine
2655	2655	if necessary to protect the public health, welfare, or safety.
2656	2656	Sec. 2022.361. SLOT MACHINE: DISTRIBUTION AND COMMISSION
2657	2657	APPROVAL. (a) A slot machine provider may not distribute a slot
2658	2658	machine or other gaming or associated equipment for placement at a
2659	2659	casino or slot establishment in this state unless the machine or
2660	2660	equipment has been approved by the commission.
2661	2661	(b) Only a person that holds a manufacturer's license issued
2662	2662	under this chapter may apply for approval of a slot machine or other
2663	2663	gaming or associated equipment.
2664	2664	Sec. 2022.362. TECHNICAL STANDARDS FOR GAMING EQUIPMENT.
2665	2665	The commission by rule shall establish minimum technical standards
2666	2666	for gaming equipment that may be operated in this state.
2667	2667	Sec. 2022.363. INCIDENT REPORTS. (a) The owner or operator
2668	2668	of a casino or slot establishment shall record all unusual
2669	2669	occurrences related to gaming activity in the casino or slot
2670	2670	establishment operated by the owner or operator.
2671	2671	(b) The owner or operator of a casino or slot establishment
2672	2672	shall assign each incident, without regard to materiality, a
2673	2673	sequential number and, at a minimum, provide the following
2674	2674	information in a permanent record prepared in accordance with
2675	2675	commission rules to ensure the integrity of the record:
2676	2676	(1) the number assigned to the incident;
2677	2677	(2) the date and time of the incident;
2678	2678	(3) the nature of the incident;
2679	2679	(4) each person involved in the incident; and
2680	2680	(5) the name of the employee or other agent of the
2681	2681	owner or operator who investigated the incident.
2682	2682	Sec. 2022.364. SLOT MACHINE EVENTS. The owner or operator
2683	2683	of a casino or slot establishment shall keep a database of slot
2684	2684	machine events. The commission by rule shall determine what
2685	2685	constitutes a slot machine event for purposes of this section.
2686	2686	Sec. 2022.365. SECURITY. (a) The owner or operator of a
2687	2687	casino or slot establishment shall:
2688	2688	(1) continuously monitor all slot machines through the
2689	2689	use of a closed-circuit television system that records activity for
2690	2690	a continuous 24-hour period, retain all videotapes or other media
2691	2691	used to store video images for at least 30 days, and make the tapes
2692	2692	or media available to the commission on request;
2693	2693	(2) submit for commission approval a security plan and
2694	2694	a floor plan of the area where slot machines are operated showing
2695	2695	slot machine locations and security camera mount locations; and
2696	2696	(3) employ at least the minimum number of private
2697	2697	security personnel the commission determines is necessary to
2698	2698	provide for safe and approved operation of the casino or slot
2699	2699	establishment and the safety and well-being of the players.
2700	2700	(b) Private security personnel must be present during all
2701	2701	hours of operation at each casino or slot establishment.
2702	2702	(c) An agent or employee of the commission or the Department
2703	2703	of Public Safety or other law enforcement personnel may be present
2704	2704	at a casino or slot establishment at any time.
2705	2705	(d) The commission may adopt rules to impose additional
2706	2706	surveillance and security requirements related to casinos or slot
2707	2707	establishments and the operation of slot machines.
2708	2708	Sec. 2022.366. COMMISSION RIGHT TO ENTER. The commission
2709	2709	or the commission's representative, after displaying appropriate
2710	2710	identification and credentials, has the free and unrestricted right
2711	2711	to:
2712	2712	(1) enter the premises of a casino or slot
2713	2713	establishment;
2714	2714	(2) enter at all times any other locations involved in
2715	2715	operation or support of slot machines; and
2716	2716	(3) inspect and copy the records of the owner or
2717	2717	operator of a casino or slot establishment pertaining to the
2718	2718	operation of slot machines.
2719	2719	Sec. 2022.367. APPOINTMENT OF SUPERVISOR. (a) The
2720	2720	commission by rule may provide for the appointment of a supervisor
2721	2721	to manage and operate a casino or slot establishment at the
2722	2722	direction of the commission and perform any act that a casino or
2723	2723	slot establishment owner or operator is entitled to perform in the
2724	2724	event that:
2725	2725	(1) an owner's or operator's license or other license
2726	2726	required for operation of the casino or slot establishment is
2727	2727	revoked or suspended, lapses, or is surrendered;
2728	2728	(2) a casino or slot establishment has been conveyed
2729	2729	or transferred to a secured party receiver or trustee who does not
2730	2730	hold the licenses necessary to operate the casino or establishment;
2731	2731	or
2732	2732	(3) any other event occurs that causes the casino or
2733	2733	establishment to cease the operation of slot machines.
2734	2734	(b) The rules may allow the commission to:
2735	2735	(1) take any action or adopt any procedure necessary
2736	2736	to operate a casino or slot establishment pending the licensing of
2737	2737	an owner or operator or a successor on the transfer or sale of the
2738	2738	casino, establishment, or property; and
2739	2739	(2) if necessary to continue the operation of the
2740	2740	casino or slot establishment, sell the casino or establishment to a
2741	2741	person that holds or has applied for the licenses required to
2742	2742	operate the casino or establishment under this chapter and make
2743	2743	appropriate distributions of the proceeds of the sale.
2744	2744	Sec. 2022.368. OFFENSE: CONVEYANCE OF CASINO OR SLOT
2745	2745	ESTABLISHMENT PROPERTY. (a) A person commits an offense if during
2746	2746	the pendency of any proceeding before the commission that may
2747	2747	result in the appointment of a supervisor or during the period of
2748	2748	supervision the person:
2749	2749	(1) sells, leases, or otherwise conveys for less than
2750	2750	full market value or pledges as security any property of a casino or
2751	2751	slot establishment; or
2752	2752	(2) removes from this state or secretes from the
2753	2753	commission or the supervisor any property, money, books, or records
2754	2754	of the casino or slot establishment, including evidences of debts
2755	2755	owed to the casino or establishment.
2756	2756	(b) An offense under Subsection (a) is a felony of the third
2757	2757	degree.
2758	2758	[Sections 2022.369-2022.400 reserved for expansion]
2759	2759	SUBCHAPTER I. ENFORCEMENT
2760	2760	Sec. 2022.401. ENFORCEMENT. (a) The executive director
2761	2761	shall conduct an appropriate investigation to:
2762	2762	(1) determine whether there has been a violation of
2763	2763	this chapter or of a commission rule;
2764	2764	(2) determine facts, conditions, practices, or
2765	2765	matters that the director considers necessary or proper to aid in
2766	2766	the enforcement of a law or rule;
2767	2767	(3) aid in adopting rules;
2768	2768	(4) secure information as a basis for recommending
2769	2769	legislation relating to this chapter; and
2770	2770	(5) determine whether a license holder is able to meet
2771	2771	the license holder's financial obligations, including all
2772	2772	financial obligations imposed by this chapter, as they become due.
2773	2773	(b) If after an investigation the executive director is
2774	2774	satisfied that a license should be limited, conditioned, suspended,
2775	2775	or revoked, or that a fine should be levied, the executive director
2776	2776	shall initiate a hearing under Section 2022.406.
2777	2777	Sec. 2022.402. PRIVILEGED DOCUMENTS. (a) A communication
2778	2778	or document of an applicant or license holder that is required by
2779	2779	law or commission rule or by a subpoena issued by the commission and
2780	2780	that is to be made or transmitted to the commission or the executive
2781	2781	director is privileged and does not impose liability for defamation
2782	2782	or constitute a ground for recovery in a civil action by a person
2783	2783	other than the commission.
2784	2784	(b) If a document or communication contains information
2785	2785	that is privileged, the privilege is not waived or lost because the
2786	2786	document or communication is disclosed to the commission or the
2787	2787	executive director.
2788	2788	(c) Notwithstanding the powers granted to the commission
2789	2789	and the executive director by this chapter:
2790	2790	(1) the commission and the executive director may not
2791	2791	release or disclose privileged information, documents, or
2792	2792	communications provided by an applicant and required by a lawful
2793	2793	court order after timely notice of the proceedings has been given to
2794	2794	the applicant or license holder without the prior written consent
2795	2795	of the applicant or license holder;
2796	2796	(2) the commission and the executive director shall
2797	2797	maintain all privileged information, documents, and communications
2798	2798	in a secure place accessible only to members of the commission and
2799	2799	the executive director; and
2800	2800	(3) the commission shall adopt procedures to protect
2801	2801	the privileged nature of information, documents, and
2802	2802	communications provided by an applicant or license holder.
2803	2803	Sec. 2022.403. RELEASE OF CONFIDENTIAL INFORMATION. An
2804	2804	application to a court for an order requiring the commission or the
2805	2805	executive director to release any information declared by law to be
2806	2806	confidential shall be made only on a motion in writing delivered not
2807	2807	later than the 10th day before the date of application to the
2808	2808	commission, the attorney general, and all persons who may be
2809	2809	affected by the entry of the order. Copies of the motion and all
2810	2810	papers filed in support of it shall be served with the notice by
2811	2811	delivering a copy in person or by certified mail to the last known
2812	2812	address of the person to be served.
2813	2813	Sec. 2022.404. EMERGENCY ORDERS. (a) The commission may
2814	2814	issue an emergency order for suspension, limitation, or
2815	2815	conditioning of a license or work permit or may issue an emergency
2816	2816	order requiring a casino or slot establishment to keep an
2817	2817	individual license holder from the premises of the licensed
2818	2818	establishment or to not pay the license holder any remuneration for
2819	2819	services or any profits, income, or accruals on the license
2820	2820	holder's investment in the casino or slot establishment.
2821	2821	(b) An emergency order may be issued only if the commission
2822	2822	determines that:
2823	2823	(1) a license holder has willfully failed to report,
2824	2824	pay, or truthfully account for a fee imposed under this chapter or
2825	2825	willfully attempted in any manner to evade or defeat a fee or
2826	2826	payment;
2827	2827	(2) a license holder or gaming employee has cheated at
2828	2828	a gambling game; or
2829	2829	(3) the action is necessary for the immediate
2830	2830	preservation of the public peace, health, safety, morals, good
2831	2831	order, or general welfare.
2832	2832	(c) The emergency order must state the grounds on which it
2833	2833	is issued, including a statement of facts constituting the alleged
2834	2834	emergency necessitating the action.
2835	2835	(d) An emergency order may be issued only with the approval
2836	2836	of and under the signature of four or more members of the
2837	2837	commission.
2838	2838	(e) An emergency order is effective immediately on issuance
2839	2839	and service on the license holder or resident agent of the license
2840	2840	holder, gaming employee, or, in cases involving registration, on
2841	2841	issuance and service on the person or entity involved or resident
2842	2842	agent of the entity involved. An emergency order may suspend,
2843	2843	limit, condition, or take other action in relation to the license of
2844	2844	one or more persons in an operation without affecting other
2845	2845	individual license holders or the casino or slot establishment. An
2846	2846	emergency order remains effective until further order of the
2847	2847	commission or final disposition of the case.
2848	2848	(f) Not later than the fifth day after the date of issuance
2849	2849	of an emergency order, the executive director shall file a
2850	2850	complaint and serve it on the person or entity involved. The person
2851	2851	or entity against whom the emergency order has been issued and
2852	2852	served is entitled to a hearing before the commission and to
2853	2853	judicial review of the decision and order of the commission under
2854	2854	Chapter 2001, Government Code. Judicial review is under the
2855	2855	substantial evidence rule.
2856	2856	Sec. 2022.405. REVOCATION OF LICENSE, CERTIFICATE OF
2857	2857	REGISTRATION, FINDING OF SUITABILITY, OR OTHER APPROVAL. (a) The
2858	2858	commission shall revoke or suspend a license, certificate of
2859	2859	registration, finding of suitability, or other affirmative
2860	2860	regulatory approval issued under this chapter if the holder of the
2861	2861	license, certificate, suitability, or approval at any time fails to
2862	2862	meet the eligibility requirements set forth in this chapter.
2863	2863	(b) Failure to timely remit gaming revenue generated by slot
2864	2864	machines to the commission or any tax or other fee owed to this
2865	2865	state as demonstrated by report from the applicable taxing
2866	2866	authority or to timely file any report or information required
2867	2867	under this chapter as a condition of any license, certificate,
2868	2868	finding of suitability, or other approval issued under this chapter
2869	2869	may be grounds for suspension or revocation, or both, of a license,
2870	2870	certificate, finding of suitability, or other approval issued under
2871	2871	this chapter.
2872	2872	Sec. 2022.406. DISCIPLINARY HEARING. (a) Before the
2873	2873	commission revokes or suspends a license, certificate of
2874	2874	registration, finding of suitability, or approval or imposes
2875	2875	monetary penalties for a violation of this chapter, the commission
2876	2876	shall provide written notification to the license, certificate,
2877	2877	finding of suitability, or approval holder of the revocation, the
2878	2878	period of suspension, or the monetary penalty. The notice shall
2879	2879	include:
2880	2880	(1) the effective date of the revocation or the period
2881	2881	of suspension or the amount of the monetary penalty, as applicable;
2882	2882	(2) each reason for the revocation, suspension, or
2883	2883	penalty;
2884	2884	(3) an explanation of the evidence supporting the
2885	2885	reasons;
2886	2886	(4) an opportunity to present the license,
2887	2887	certificate, finding of suitability, or approval holder's position
2888	2888	in response on or before the 15th day after the effective date of
2889	2889	the revocation; and
2890	2890	(5) a statement explaining the person's right to an
2891	2891	administrative hearing to determine whether the revocation,
2892	2892	suspension, or penalty is warranted.
2893	2893	(b) The notice required under Subsection (a) must be made by
2894	2894	personal delivery or by mail to the person's mailing address as it
2895	2895	appears on the commission's records.
2896	2896	(c) To obtain an administrative hearing on a suspension,
2897	2897	revocation, or penalty under this section, a person must submit a
2898	2898	written request for a hearing to the commission not later than the
2899	2899	20th day after the date notice is delivered personally or is mailed.
2900	2900	(d) If the commission receives a timely request under
2901	2901	Subsection (c), the commission shall provide the person with an
2902	2902	opportunity for a hearing as soon as practicable. If the commission
2903	2903	does not receive a timely request under Subsection (c), the
2904	2904	commission may impose the penalty, revoke or suspend a license,
2905	2905	certificate, finding of suitability, or approval, or sustain the
2906	2906	revocation or suspension without a hearing.
2907	2907	(e) Except as provided by Subsection (f), the hearing must
2908	2908	be held not earlier than the 11th day after the date the written
2909	2909	request is submitted to the commission.
2910	2910	(f) The commission may provide that a revocation or
2911	2911	suspension takes effect on receipt of notice under Subsection (a)
2912	2912	if the commission finds that the action is necessary to prevent or
2913	2913	remedy a threat to public health, safety, or welfare. The
2914	2914	commission by rule shall establish a nonexclusive list of
2915	2915	violations that present a threat to the public health, safety, or
2916	2916	welfare.
2917	2917	(g) A hearing on a revocation or suspension that takes
2918	2918	effect on receipt of notice must be held not later than the 14th day
2919	2919	after the date the commission receives the request for hearing
2920	2920	under this section. The revocation or suspension continues in
2921	2921	effect until the hearing is completed. If the hearing is continued,
2922	2922	the revocation or suspension shall continue in effect beyond the
2923	2923	14-day period at the request of the license, certificate, finding
2924	2924	of suitability, or approval holder or on a finding of good cause by
2925	2925	the commission or administrative law judge.
2926	2926	(h) To prevail in a post-deprivation administrative hearing
2927	2927	under this section, the license, certificate, finding of
2928	2928	suitability, or approval holder must demonstrate by clear and
2929	2929	convincing evidence that the deprivation or imposition of a penalty
2930	2930	was unwarranted or otherwise unlawful. The post-deprivation
2931	2931	hearing may be conducted by the commission or referred to the State
2932	2932	Office of Administrative Hearings.
2933	2933	(i) The administrative record created by the hearing
2934	2934	conducted by the State Office of Administrative Hearings shall be
2935	2935	provided to the commission for review and determination on the
2936	2936	revocation or suspension.
2937	2937	(j) If an administrative law judge of the State Office of
2938	2938	Administrative Hearings conducts a hearing under this section and
2939	2939	the proposal for decision supports the commission's position, the
2940	2940	administrative law judge shall include in the proposal a finding of
2941	2941	the costs, fees, expenses, and reasonable and necessary attorney's
2942	2942	fees this state incurred in bringing the proceeding.
2943	2943	(k) The commission may adopt the findings for costs, fees,
2944	2944	and expenses and make the finding a part of the final order entered
2945	2945	in the proceeding. Proceeds collected from a finding made under
2946	2946	this section shall be paid to the commission.
2947	2947	Sec. 2022.407. JUDICIAL REVIEW OF REVOCATION, SUSPENSION,
2948	2948	OR PENALTY IMPOSITION. (a) A person aggrieved by a final decision
2949	2949	of the commission to revoke or suspend a license, certificate of
2950	2950	registration, finding of suitability, or approval or to impose any
2951	2951	monetary penalty may obtain judicial review before a district court
2952	2952	in Travis County.
2953	2953	(b) The judicial review must be instituted by serving on the
2954	2954	commission and filing a petition not later than the 20th day after
2955	2955	the effective date of the final decision and must identify the order
2956	2956	appealed from and the grounds or reason why the petitioner contends
2957	2957	the decision of the commission should be reversed or modified.
2958	2958	(c) The review must be conducted by the court sitting
2959	2959	without jury, and must not be a trial de novo but is confined to the
2960	2960	record on review. The reviewing court may only affirm the decision,
2961	2961	remand the case for further proceedings, or reverse the decision if
2962	2962	the substantial rights of the petitioner have been violated.
2963	2963	(d) If any court of competent jurisdiction concludes on
2964	2964	judicial review limited to the administrative record before the
2965	2965	commission and subject to the substantial evidence standard that
2966	2966	the deprivation or penalty was unwarranted or otherwise unlawful,
2967	2967	the sole remedy available is invalidation of the penalty or
2968	2968	reinstatement of the license, certificate of registration, finding
2969	2969	of suitability, or approval and the continued distribution,
2970	2970	manufacture, or operation of slot machines.
2971	2971	(e) The commission, this state, or the members, officers,
2972	2972	employees, and authorized agents of either are not under any
2973	2973	circumstances subject to monetary damages, attorney's fees, or
2974	2974	court costs resulting from the penalty or license, certificate,
2975	2975	finding of suitability, or approval revocation.
2976	2976	Sec. 2022.408. EFFECT OF DENIAL OF LICENSE, REGISTRATION,
2977	2977	FINDING OF SUITABILITY, OR APPROVAL. (a) A person whose
2978	2978	application for a license, certificate of registration, finding of
2979	2979	suitability, or other affirmative regulatory approval has been
2980	2980	denied may not have any interest in or association with a slot
2981	2981	establishment owner or operator or any other business conducted in
2982	2982	connection with slot machines under this chapter without prior
2983	2983	approval of the commission.
2984	2984	(b) Any contract related to the operation of slot machines
2985	2985	in this state between a person holding a license, certificate of
2986	2986	registration, finding of suitability, or other affirmative
2987	2987	regulatory approval and a person denied a license, certificate of
2988	2988	registration, finding of suitability, or other affirmative
2989	2989	regulatory approval must be terminated immediately. If the person
2990	2990	denied a license, certificate, finding of suitability, or approval
2991	2991	has previously been granted a temporary license, certificate,
2992	2992	finding of suitability, or approval, the temporary license,
2993	2993	certificate, finding of suitability, or approval expires
2994	2994	immediately on denial of the permanent license, certificate,
2995	2995	finding of suitability, or approval.
2996	2996	(c) Except as otherwise authorized by the commission, a
2997	2997	person denied a license, certificate of registration, finding of
2998	2998	suitability, or other affirmative regulatory approval may not
2999	2999	reapply for any license, certificate, finding of suitability, or
3000	3000	approval before the second anniversary of the date of the denial.
3001	3001	Sec. 2022.409. AGREEMENT TO WAIVE ENFORCEABILITY. A
3002	3002	license, certificate, finding of suitability, or approval holder by
3003	3003	virtue of accepting the license, certificate, finding of
3004	3004	suitability, or approval agrees that the privilege of holding a
3005	3005	license, certificate, finding of suitability, or approval under
3006	3006	this chapter is conditioned on the holder's agreement to Sections
3007	3007	2022.405-2022.407 and waives any right to challenge or otherwise
3008	3008	appeal the enforceability of those sections.
3009	3009	Sec. 2022.410. LIMITED WAIVER OF SOVEREIGN IMMUNITY; NO
3010	3010	LIABILITY OF STATE FOR ENFORCEMENT. (a) This state does not waive
3011	3011	its sovereign immunity by negotiating gaming agreements with Indian
3012	3012	tribes or other persons for the operation of gaming or gambling
3013	3013	games under this subtitle. An actor or agent for this state may not
3014	3014	waive this state's sovereign immunity absent an express legislative
3015	3015	grant of the authority. The only waiver of sovereign immunity
3016	3016	relative to gaming operations is that expressly provided for in
3017	3017	this section.
3018	3018	(b) With regard to gaming operations on Indian lands, this
3019	3019	state consents to the jurisdiction of the District Court of the
3020	3020	United States with jurisdiction in the county where the Indian
3021	3021	lands are located, or if the federal court lacks jurisdiction, to
3022	3022	the jurisdiction of a district court in Travis County, solely for
3023	3023	the purpose of resolving disputes arising from a gaming agreement
3024	3024	authorized under this chapter or Chapter 2023 for declaratory or
3025	3025	injunctive relief or contract damages of $100,000 or more. Any
3026	3026	disputes relating to damages or other awards valued at less than
3027	3027	$100,000 shall be arbitrated under the rules of the American
3028	3028	Arbitration Association, provided, however, that application of
3029	3029	the rules may not be construed as a waiver of sovereign immunity.
3030	3030	(c) All financial obligations of the commission are payable
3031	3031	solely out of the income, revenues, and receipts of the commission
3032	3032	and are subject to statutory restrictions and appropriations.
3033	3033	(d) This state and the commission are not liable if
3034	3034	performance by the commission is compromised or terminated by acts
3035	3035	or omissions of the legislature or the state or federal judiciary.
3036	3036	(e) This state and the commission are not liable related to
3037	3037	enforcement of this chapter.
3038	3038	Sec. 2022.411. ABSOLUTE PRIVILEGE OF REQUIRED
3039	3039	COMMUNICATIONS AND DOCUMENTS. (a) Any communication, document, or
3040	3040	record of an applicant for or holder of a license, certificate,
3041	3041	finding of suitability, or regulatory approval that is made or
3042	3042	transmitted to the commission or any of its employees to comply with
3043	3043	any law, including a rule of the commission, to comply with a
3044	3044	subpoena issued by the commission, or to assist the commission or
3045	3045	its designee in the performance of their respective duties is
3046	3046	absolutely privileged, does not impose liability for defamation,
3047	3047	and is not a ground for recovery in any civil action.
3048	3048	(b) If a communication, document, or record provided under
3049	3049	Subsection (a) contains any information that is privileged under
3050	3050	state law, that privilege is not waived or lost because the
3051	3051	communication, document, or record is disclosed to the commission
3052	3052	or any commission employees.
3053	3053	(c) The commission shall maintain all privileged
3054	3054	information, communications, documents, and records in a secure
3055	3055	place as determined in the commission's sole discretion that is
3056	3056	accessible only to commission members and authorized commission
3057	3057	employees.
3058	3058	[Sections 2022.412-2022.450 reserved for expansion]
3059	3059	SUBCHAPTER J. PENALTIES AND OFFENSES
3060	3060	Sec. 2022.451. FAILURE TO PAY FEES. (a) License fees and
3061	3061	other fees required by this chapter must be paid to the commission
3062	3062	on or before the dates provided by law for each fee.
3063	3063	(b) A person failing to timely pay a fee or tax when due
3064	3064	shall pay in addition a penalty of not less than $50 or 25 percent of
3065	3065	the amount due, whichever is the greater. The penalty may not
3066	3066	exceed $1,000 if the fee or tax is less than 10 days late and may not
3067	3067	exceed $5,000 under any circumstances. The penalty shall be
3068	3068	collected as are other charges, license fees, and penalties under
3069	3069	this chapter.
3070	3070	Sec. 2022.452. FAILURE TO REPORT, PAY, OR ACCOUNT FOR FEE OR
3071	3071	TAX. (a) A person commits an offense if the person willfully fails
3072	3072	to report, pay, or truthfully account for a fee or tax imposed under
3073	3073	this chapter or willfully attempts in any manner to evade or defeat
3074	3074	a fee or tax.
3075	3075	(b) An offense under this section is a Class A misdemeanor.
3076	3076	Sec. 2022.453. GAMING FRAUD. (a) A person commits an
3077	3077	offense if the person knowingly:
3078	3078	(1) alters or misrepresents the outcome of a game or
3079	3079	other event on which wagers have been made after the outcome is made
3080	3080	sure but before it is revealed to the players;
3081	3081	(2) places, increases, or decreases a bet or
3082	3082	determines the course of play after acquiring knowledge, not
3083	3083	available to all players, of the outcome of the game or an event
3084	3084	that affects the outcome of the game or that is the subject of the
3085	3085	bet or aids anyone in acquiring such knowledge for the purpose of
3086	3086	placing, increasing, or decreasing a bet or determining the course
3087	3087	of play contingent on that event or outcome;
3088	3088	(3) claims, collects, or takes, or attempts to claim,
3089	3089	collect, or take, money or anything of value in or from a gambling
3090	3090	game, with intent to defraud, without having made a wager
3091	3091	contingent on the game, or claims, collects, or takes an amount
3092	3092	greater than the amount won;
3093	3093	(4) entices or induces another to go to a place where a
3094	3094	gambling game is being conducted or operated in violation of this
3095	3095	subtitle, with the intent that the other person play or participate
3096	3096	in that gambling game;
3097	3097	(5) places or increases a bet after acquiring
3098	3098	knowledge of the outcome of the game or other event that is the
3099	3099	subject of the bet, including past posting and pressing bets;
3100	3100	(6) reduces the amount wagered or cancels the bet
3101	3101	after acquiring knowledge of the outcome of the game or other event
3102	3102	that is the subject of the bet, including pinching bets; or
3103	3103	(7) manipulates, with the intent to cheat, a component
3104	3104	of a gaming device in a manner contrary to the designed and normal
3105	3105	operational purpose for the component, including varying the pull
3106	3106	of the handle of a slot machine, with knowledge that the
3107	3107	manipulation affects the outcome of the game or with knowledge of an
3108	3108	event that affects the outcome of the game.
3109	3109	(b) An offense under this section is a felony of the third
3110	3110	degree.
3111	3111	Sec. 2022.454. USE OF PROHIBITED DEVICES. (a) A person
3112	3112	commits an offense if the person, at a casino or slot establishment,
3113	3113	uses or possesses with the intent to use a device, other than those
3114	3114	customarily used in the conduct of gaming to assist in:
3115	3115	(1) projecting the outcome of the game;
3116	3116	(2) keeping track of the cards played;
3117	3117	(3) analyzing the probability of the occurrence of an
3118	3118	event relating to the game; or
3119	3119	(4) analyzing the strategy for playing or betting to
3120	3120	be used in the game.
3121	3121	(b) An offense under this section is a felony of the third
3122	3122	degree.
3123	3123	Sec. 2022.455. USE OF COUNTERFEIT OR UNAUTHORIZED TOKEN,
3124	3124	CHIP, OR COIN. (a) A person commits an offense if the person
3125	3125	knowingly uses counterfeit chips or tokens in a gambling game.
3126	3126	(b) A person commits an offense if the person, in playing
3127	3127	any gambling game designed to receive, be played with, or be
3128	3128	operated by chips or tokens approved by the executive director or by
3129	3129	lawful coin of the United States of America:
3130	3130	(1) knowingly uses a chip, token, or coin other than
3131	3131	chips or tokens approved by the commission or lawful coin of the
3132	3132	United States of America, or uses a coin not of the same
3133	3133	denomination as the coin intended to be used in that gambling game;
3134	3134	or
3135	3135	(2) uses any device or means to violate the provisions
3136	3136	of this chapter.
3137	3137	(c) A person, other than an authorized employee of an
3138	3138	owner's license holder acting in furtherance of the person's
3139	3139	employment within an establishment, commits an offense if the
3140	3140	person knowingly has on the person's body or in the person's
3141	3141	possession on or off the premises of a casino a device intended to
3142	3142	be used to violate the provisions of this chapter.
3143	3143	(d) A person, other than an authorized employee of a license
3144	3144	holder acting in furtherance of the person's employment within a
3145	3145	casino or slot establishment, commits an offense if the person
3146	3146	knowingly has on the person's body or in the person's possession on
3147	3147	or off the premises of a casino or slot establishment a key or
3148	3148	device known to have been designed for the purpose of and suitable
3149	3149	for opening, entering, or affecting the operation of a gambling
3150	3150	game, a drop box, or an electronic or mechanical device connected to
3151	3151	the game or box or for removing money or other contents from the
3152	3152	game or box.
3153	3153	(e) A person commits an offense if the person, with the
3154	3154	intent to manufacture slugs for unauthorized use in gaming devices
3155	3155	located at a casino or slot establishment, knowingly has on the
3156	3156	person's body or in the person's possession paraphernalia for
3157	3157	manufacturing slugs. In this subsection, "paraphernalia for
3158	3158	manufacturing slugs" means the equipment, products, and materials
3159	3159	that are intended for use or designed for use in manufacturing,
3160	3160	producing, fabricating, preparing, testing, analyzing, packaging,
3161	3161	storing, or concealing a counterfeit facsimile of the chips or
3162	3162	tokens approved by the executive director or a lawful coin of the
3163	3163	United States, the use of which is an offense under Subsection (b).
3164	3164	The term includes:
3165	3165	(1) lead or lead alloys;
3166	3166	(2) molds, forms, or similar equipment capable of
3167	3167	producing a likeness of a gaming token or United States coin;
3168	3168	(3) melting pots or other receptacles;
3169	3169	(4) torches; and
3170	3170	(5) tongs, trimming tools, or other similar equipment.
3171	3171	(f) Possession of more than one of the devices, equipment,
3172	3172	products, or materials described in this section permits a
3173	3173	rebuttable inference that the possessor intended to use them for
3174	3174	cheating.
3175	3175	(g) An offense under this section is a felony of the third
3176	3176	degree.
3177	3177	Sec. 2022.456. CHEATING. (a) In this section, "cheat"
3178	3178	means to alter the elements of chance, method of selection, or
3179	3179	criteria that determine the result of a game or the amount or
3180	3180	frequency of payment in a game.
3181	3181	(b) A person commits an offense if the person knowingly
3182	3182	cheats at any gambling game.
3183	3183	(c) An offense under this section is a state jail felony.
3184	3184	Sec. 2022.457. POSSESSION OF UNLAWFUL DEVICES. (a) A
3185	3185	person commits an offense if the person knowingly possesses any
3186	3186	slot machine or other gaming device that has been manufactured,
3187	3187	sold, or distributed in violation of this chapter.
3188	3188	(b) An offense under this section is a Class A misdemeanor.
3189	3189	Sec. 2022.458. UNLAWFUL MANUFACTURE, SALE, OR DISTRIBUTION
3190	3190	OF GAMING EQUIPMENT. (a) In this section, "cheat" has the meaning
3191	3191	assigned by Section 2022.456.
3192	3192	(b) A person commits an offense if the person manufactures,
3193	3193	sells, or distributes cards, chips, dice, a game, or a device
3194	3194	intended to be used to violate this chapter.
3195	3195	(c) A person commits an offense if the person marks, alters,
3196	3196	or otherwise modifies any associated equipment or gaming device in
3197	3197	a manner that:
3198	3198	(1) affects the result of a wager by determining win or
3199	3199	loss; or
3200	3200	(2) alters the normal criteria of random selection
3201	3201	that affect the operation of a game or determine the outcome of a
3202	3202	game.
3203	3203	(d) A person commits an offense if the person instructs
3204	3204	another person in cheating or in the use of a device for cheating at
3205	3205	any game authorized to be conducted at a casino or slot
3206	3206	establishment, with the knowledge or intent that the information or
3207	3207	use may be employed to violate this chapter.
3208	3208	(e) An offense under this section is a felony of the third
3209	3209	degree.
3210	3210	Sec. 2022.459. REPORTING PENALTIES. (a) A person commits
3211	3211	an offense if the person, in a license application, in a book or
3212	3212	record required to be maintained by this chapter or a rule adopted
3213	3213	under this chapter, or in a report required to be submitted by this
3214	3214	chapter or a rule adopted under this chapter:
3215	3215	(1) makes a statement or entry that the person knows to
3216	3216	be false or misleading; or
3217	3217	(2) knowingly fails to maintain or make an entry the
3218	3218	person knows is required to be maintained or made.
3219	3219	(b) A person commits an offense if the person knowingly
3220	3220	refuses to produce for inspection by the executive director a book,
3221	3221	record, or document required to be maintained or made by this
3222	3222	chapter or a rule adopted under this chapter.
3223	3223	(c) An offense under this section is a Class A misdemeanor.
3224	3224	Sec. 2022.460. GENERAL PENALTY. (a) A person commits an
3225	3225	offense if the person knowingly or wilfully violates, attempts to
3226	3226	violate, or conspires to violate a provision of this chapter
3227	3227	specifying a prohibited act.
3228	3228	(b) Unless another penalty is specified for the violation,
3229	3229	an offense under this section is a Class A misdemeanor.
3230	3230	Sec. 2022.461. UNAUTHORIZED OPERATION, USE, OR POSSESSION
3231	3231	OF GAMING DEVICE. (a) A person may not operate, use, or possess a
3232	3232	gaming device unless the operation, use, or possession is expressly
3233	3233	authorized by this chapter or other law.
3234	3234	(b) Except for transport to or from a casino or slot
3235	3235	establishment and as provided by this chapter, a person commits an
3236	3236	offense if the person operates, uses, or possesses a gaming device
3237	3237	that is not authorized under this chapter or other law. An offense
3238	3238	under this subsection is a felony of the third degree.
3239	3239	(c) Notwithstanding Subsection (b), a casino owner or
3240	3240	operator, slot establishment owner or operator, or a manufacturer
3241	3241	may store a gaming device as authorized by the commission for a
3242	3242	period not to exceed 120 consecutive days, and the commission may
3243	3243	possess gaming devices for study and evaluation.
3244	3244	(d) Nothing in this section shall be construed to prohibit
3245	3245	the operation, use, or possession of equipment, machines,
3246	3246	technological aids, or other devices allowed in connection with the
3247	3247	play of bingo under Chapter 2001.
3248	3248	Sec. 2022.462. PLAY OF GAME ON CREDIT. (a) A person
3249	3249	licensed under this chapter or an employee of a person licensed
3250	3250	under this chapter commits an offense if the person intentionally
3251	3251	or knowingly allows a person to play or conduct a game on a gaming
3252	3252	device by extending credit or lending money to the person to enable
3253	3253	the person to play the game.
3254	3254	(b) An offense under this section is a Class C misdemeanor.
3255	3255	Sec. 2022.463. SALE OF GAMBLING GAME TO OR PURCHASE OF
3256	3256	GAMBLING GAME BY PERSON YOUNGER THAN 21 YEARS OF AGE. (a) A person
3257	3257	licensed under this chapter or an employee of the person commits an
3258	3258	offense if the person intentionally or knowingly allows a person
3259	3259	younger than 21 years of age to play a gambling game.
3260	3260	(b) An individual who is younger than 21 years of age
3261	3261	commits an offense if the individual:
3262	3262	(1) plays a gambling game; or
3263	3263	(2) falsely represents the individual to be 21 years
3264	3264	of age or older by displaying evidence of age that is false or
3265	3265	fraudulent or misrepresents in any way the individual's age in
3266	3266	order to play a gambling game.
3267	3267	(c) It is a defense to prosecution under Subsection (b) that
3268	3268	the individual younger than 21 years of age is participating in an
3269	3269	inspection or investigation on behalf of the commission or other
3270	3270	appropriate governmental entity regarding compliance with this
3271	3271	section.
3272	3272	(d) An offense under Subsection (a) is a Class C
3273	3273	misdemeanor.
3274	3274	(e) An offense under Subsection (b) is a misdemeanor
3275	3275	punishable by a fine not to exceed $250.
3276	3276	Sec. 2022.464. PURCHASE OF GAMBLING GAME WITH PROCEEDS OF
3277	3277	AFDC CHECK OR FOOD STAMPS. (a) A person commits an offense if the
3278	3278	person intentionally or knowingly plays a gambling game with:
3279	3279	(1) the proceeds of a check issued as a payment under
3280	3280	the Aid to Families with Dependent Children program administered
3281	3281	under Chapter 31, Human Resources Code; or
3282	3282	(2) a food stamp coupon issued under the food stamp
3283	3283	program administered under Chapter 33, Human Resources Code.
3284	3284	(b) An offense under this section is a Class C misdemeanor.
3285	3285	Sec. 2022.465. TAMPERING WITH GAMING OR ASSOCIATED
3286	3286	EQUIPMENT. (a) A person commits an offense if the person
3287	3287	intentionally or knowingly tampers with, damages, defaces, or
3288	3288	renders inoperable any vending machine, electronic computer
3289	3289	terminal, gaming device or other gaming or associated equipment, or
3290	3290	other mechanical device used in a gambling game.
3291	3291	(b) An offense under this section is a felony of the third
3292	3292	degree.
3293	3293	[Sections 2022.466-2022.500 reserved for expansion]
3294	3294	SUBCHAPTER K. LOCAL OPTION ELECTIONS
3295	3295	Sec. 2022.501. ORDERING LOCAL OPTION ELECTION. The
3296	3296	commissioners court of a county may at any time order an election to
3297	3297	legalize casino gaming under this chapter in that county. The
3298	3298	commissioners court shall order and hold an election to legalize
3299	3299	gaming under this chapter in the county if the commissioners court
3300	3300	is presented with a petition that meets the requirements of Section
3301	3301	2022.502 and is certified as valid under Section 2022.503.
3302	3302	Sec. 2022.502. PETITION REQUIREMENTS. (a) A petition for a
3303	3303	legalization election must include a statement substantially as
3304	3304	follows before the space reserved for signatures on each page:
3305	3305	"This petition is to require that an election be held in (name of
3306	3306	county) to legalize casino gaming in (name of county)."
3307	3307	(b) A petition is valid only if it is signed by registered
3308	3308	voters of the county in a number that is not less than three percent
3309	3309	of the total number of votes cast for governor by qualified voters
3310	3310	of the county in the most recent gubernatorial general election.
3311	3311	(c) Each voter must enter beside the voter's signature the
3312	3312	date the voter signs the petition. A signature may not be counted
3313	3313	as valid if the date of signing is earlier than the 90th day before
3314	3314	the date the petition is submitted to the commissioners court.
3315	3315	(d) Each voter must provide on the petition the voter's
3316	3316	current voter registration number, printed name, and residence
3317	3317	address, including zip code.
3318	3318	Sec. 2022.503. VERIFICATION. (a) Not later than the fifth
3319	3319	day after the date a petition for an election under this chapter is
3320	3320	received in the office of the commissioners court, the
3321	3321	commissioners court shall submit the petition for verification to
3322	3322	the county clerk.
3323	3323	(b) The county clerk shall determine whether the petition is
3324	3324	signed by the required number of registered voters of the county.
3325	3325	Not later than the 30th day after the date the petition is submitted
3326	3326	to the clerk for verification, the clerk shall certify in writing to
3327	3327	the commissioners court whether the petition is valid or invalid.
3328	3328	If the clerk determines that the petition is invalid, the clerk
3329	3329	shall state the reasons for that determination.
3330	3330	Sec. 2022.504. ORDERING ELECTION. If the county clerk
3331	3331	certifies that a petition is valid, not later than the 30th day
3332	3332	after the date of certification, the commissioners court shall
3333	3333	order that an election be held in the county on the next uniform
3334	3334	election date under Section 41.001, Election Code, that allows
3335	3335	sufficient time to comply with applicable provisions of law,
3336	3336	including Section 3.005, Election Code. The commissioners court
3337	3337	shall state in the order the issue to be voted on. The county clerk
3338	3338	shall notify the commission by certified mail, return receipt
3339	3339	requested, that an election has been ordered.
3340	3340	Sec. 2022.505. BALLOT PROPOSITION. The ballot in a
3341	3341	legalization election shall be printed to provide for voting for or
3342	3342	against the proposition: "Legalizing casino gaming within (name of
3343	3343	county)."
3344	3344	Sec. 2022.506. ELECTION RESULTS. (a) If the majority of
3345	3345	the votes cast in a legalization election favor the legalization of
3346	3346	casino gaming, casino gaming authorized under this chapter is
3347	3347	permitted within the county holding the election effective on the
3348	3348	10th day after the date of the election.
3349	3349	(b) The commissioners court of a county in which a
3350	3350	legalization election has been held shall give written notice of
3351	3351	the results of the election to the commission not later than the
3352	3352	third day after the date the election is canvassed.
3353	3353	(c) If less than a majority of the votes cast in a
3354	3354	legalization election in any county are cast in favor of the
3355	3355	legalization of casino gaming, casino gaming is not permitted in
3356	3356	the county, and a subsequent election on the issue may not be held
3357	3357	in the county before the corresponding uniform election date one
3358	3358	year after the date of the election.
3359	3359	(d) If less than a majority of the votes cast in two
3360	3360	consecutive legalization elections within any county are cast in
3361	3361	favor of the legalization of casino gaming, casino gaming is not
3362	3362	permitted in the county, and a subsequent election on the issue may
3363	3363	not be held in the county before the corresponding uniform election
3364	3364	date five years after the date of the second election.
3365	3365	[Sections 2022.507-2022.550 reserved for expansion]
3366	3366	SUBCHAPTER L. PROBLEM GAMBLING AND ADDICTION
3367	3367	Sec. 2022.551. PROBLEM GAMBLING AND ADDICTION GRANT FUND.
3368	3368	(a) The problem gambling and addiction grant fund is an account in
3369	3369	the general revenue fund.
3370	3370	(b) Money credited to the fund may be used only for awarding
3371	3371	grants under this subchapter. The fund shall be administered in
3372	3372	accordance with this subchapter.
3373	3373	(c) An expenditure from the problem gambling and addiction
3374	3374	grant fund shall be made in accordance with the General
3375	3375	Appropriations Act on warrants of the comptroller.
3376	3376	(d) Grants from money in the fund may be used only to:
3377	3377	(1) provide treatment for problem gaming and gambling
3378	3378	addiction, alcoholism, drug abuse, and other addictive behaviors;
3379	3379	and
3380	3380	(2) provide funding for research related to the impact
3381	3381	of gambling on state residents.
3382	3382	Sec. 2022.552. GRANT PROGRAM. (a) The commission shall
3383	3383	administer a grant program to provide assistance for the direct
3384	3384	treatment of persons diagnosed as suffering from pathological
3385	3385	gambling and other addictive behaviors and to provide funding for
3386	3386	research regarding the impact of gambling on residents of this
3387	3387	state.
3388	3388	(b) Research grants awarded under this section may include
3389	3389	grants for determining the effectiveness of education and
3390	3390	prevention efforts on the prevalence of pathological gambling in
3391	3391	this state.
3392	3392	(c) A grant may be made only after open solicitation of
3393	3393	proposals and evaluation of proposals against criteria established
3394	3394	by commission rule.
3395	3395	(d) Public and private entities are eligible to apply for
3396	3396	and receive grants under this section.
3397	3397	(e) A grant made in accordance with this section shall be
3398	3398	made from the problem gambling and addiction grant fund.
3399	3399	Sec. 2022.553. GIFTS AND DONATIONS. The commission may
3400	3400	solicit and accept grants, gifts, contributions, or bequests made
3401	3401	for the purpose of funding grants under this subchapter and expend
3402	3402	the money for the purpose for which it was received.
3403	3403	Sec. 2022.554. RULES. (a) The commission shall administer
3404	3404	this subchapter and adopt rules establishing criteria for
3405	3405	qualification to receive grants and other matters considered
3406	3406	necessary by the commission for the administration of this
3407	3407	subchapter.
3408	3408	(b) The rules adopted by the commission must require that
3409	3409	each recipient of a grant report at least annually to the commission
3410	3410	the grantee's measurable achievement of specific outcome goals.
3411	3411	CHAPTER 2023. TRIBAL GAMING AGREEMENTS
3412	3412	Sec. 2023.001. DUTY OF GOVERNOR. The governor shall
3413	3413	execute, on behalf of this state, with a federally recognized
3414	3414	Indian tribe with Indian lands in this state a gaming agreement
3415	3415	containing the terms set forth in Section 2023.002, as a
3416	3416	ministerial act, without preconditions, not later than the 30th day
3417	3417	after the date the governor receives a request from the tribe,
3418	3418	accompanied by or in the form of a duly enacted resolution of the
3419	3419	tribe's governing body, to enter into the gaming agreement.
3420	3420	Sec. 2023.002. MODEL TRIBAL GAMING AGREEMENT. (a) A gaming
3421	3421	agreement executed under Section 2023.001 must be in the form and
3422	3422	contain the provisions as follows:
3423	3423	GAMING AGREEMENT GOVERNING GAMING OPERATIONS Between the [Name of
3424	3424	Tribe] and the STATE OF TEXAS
3425	3425	This agreement is made and entered into by and between the
3426	3426	[Name of Tribe], a federally recognized Indian Tribe ("Tribe"), and
3427	3427	the State of Texas ("State"), with respect to gaming on the Tribe's
3428	3428	Indian lands (as defined by Chapter 2022, Texas Occupations Code).
3429	3429	This agreement governs gambling on Indian lands held in trust
3430	3430	by the United States on January 1, 1998, for the Tribe.
3431	3431	Pursuant to express provisions of the Restoration Acts (Pub.
3432	3432	L. No. 100-89) addressing jurisdiction, the Tribe may engage in any
3433	3433	gaming activities that another person may be authorized to engage
3434	3434	in under Subtitle A-1, Title 13, Occupations Code.
3435	3435	The Tribe shall regulate the gaming activities authorized
3436	3436	under this agreement on the Tribe's Indian lands.
3437	3437	The Tribe shall adopt rules and procedures substantially
3438	3438	similar to the requirements of Subtitle A-1, Title 13, Occupations
3439	3439	Code, except that any regulatory oversight established under
3440	3440	Subtitle A-1 for gaming conducted under a license shall be
3441	3441	exercised by the Tribe for gaming conducted under this agreement.
3442	3442	The Tribe may adopt the rules and procedures by reference to any
3443	3443	provisions of Subtitle A-1, Title 13, Occupations Code.
3444	3444	(b) A gaming agreement under Subsection (a) between this
3445	3445	state and a federally recognized Indian Tribe that is not subject to
3446	3446	the Restoration Acts (Pub. L. No. 100-89) may not include the
3447	3447	provision related to the Restoration Acts.
3448	3448	Sec. 2023.003. NEGOTIATION FOR DIFFERENT TRIBAL GAMING
3449	3449	AGREEMENT TERMS. (a) Nothing in this subchapter may be construed
3450	3450	to limit the ability of a federally recognized Indian tribe to
3451	3451	request that a gaming agreement be negotiated with this state on
3452	3452	terms that are different from those set forth in the gaming
3453	3453	agreement under Section 2023.002, or the ability of this state to
3454	3454	engage in negotiations and to reach agreement under any applicable
3455	3455	federal law.
3456	3456	(b) In offering to enter into a gaming agreement with Indian
3457	3457	tribes in this state under Section 2023.002, and, except for
3458	3458	assessments by this state as provided in that section of the amounts
3459	3459	necessary to defray state costs of regulating activities as
3460	3460	provided under the gaming agreement, nothing in this chapter may be
3461	3461	construed to mean that:
3462	3462	(1) this state is imposing any tax, fee, charge, or
3463	3463	other assessment on an Indian tribe or on any other person or entity
3464	3464	authorized by an Indian tribe as a condition to engaging in a Class
3465	3465	III activity; or
3466	3466	(2) this state is refusing to enter into gaming
3467	3467	agreement negotiations based on the lack of authority of this state
3468	3468	or a political subdivision of this state to impose the tax, fee,
3469	3469	charge, or other assessment.
3470	3470	(c) If any federally recognized tribe with jurisdiction
3471	3471	over Indian lands in this state requests that the governor enter
3472	3472	into negotiations for a gaming agreement under federal law
3473	3473	applicable to the tribe, including the Indian Gaming Regulatory Act
3474	3474	(18 U.S.C. Section 1166 and 25 U.S.C. Section 2701 et seq.), on
3475	3475	terms different than those prescribed in the gaming agreement set
3476	3476	forth in Section 2023.002, the governor shall enter into those
3477	3477	negotiations under the federal law applicable to the tribe and
3478	3478	without preconditions and is authorized to reach agreement and
3479	3479	execute the agreement on behalf of this state.
3480	3480	Sec. 2023.004. IMPLEMENTATION OF GAMING AGREEMENT. The
3481	3481	governor shall execute any documents necessary to implement a
3482	3482	gaming agreement authorized under this subchapter.
3483	3483	Sec. 2023.005. INCORPORATION INTO STATE LAW. The model
3484	3484	gaming agreement set out in Section 2023.002 is hereby incorporated
3485	3485	into state law, and the operation of gaming authorized under the
3486	3486	agreement is expressly authorized as a matter of state law for any
3487	3487	Indian tribe entering into the gaming agreement in accordance with
3488	3488	this subchapter.
3489	3489	Sec. 2023.006. REGULATORY MONEY RECEIVED UNDER GAMING
3490	3490	AGREEMENT. All money received by the commission under a gaming
3491	3491	agreement for regulatory costs incurred relative to tribal gaming
3492	3492	operations may be used only to defray expenses of the commission
3493	3493	incurred in the oversight, compliance with, and enforcement of
3494	3494	gaming operations conducted pursuant to a gaming agreement.
3495	3495	Sec. 2023.007. INJUNCTION; CIVIL PENALTY. (a) If the
3496	3496	commission, the appropriate governing body for an Indian tribe, or
3497	3497	the attorney general has reason to believe that this chapter has
3498	3498	been or is about to be violated, the attorney general may petition a
3499	3499	court for appropriate injunctive relief to restrain the violation.
3500	3500	Filing of the petition does not waive applicable sovereign
3501	3501	immunity.
3502	3502	(b) Venue for an action by this state seeking injunctive
3503	3503	relief is in a district court in Travis County.
3504	3504	(c) If the court finds that this chapter has been knowingly
3505	3505	violated, the court shall order all proceeds from any illegal
3506	3506	gambling to be forfeited to the appropriate governing body as a
3507	3507	civil penalty.
3508	3508	(d) The remedies provided by this section are not exclusive.
3509	3509	The commission may suspend or revoke a license, registration,
3510	3510	finding of suitability, or other affirmative regulatory approval,
3511	3511	impose an administrative penalty, or seek injunctive or civil
3512	3512	penalties or both, depending on the severity of the violation.
3513	3513	SECTION 2. Article 4, Texas Racing Act (Article 179e,
3514	3514	Vernon's Texas Civil Statutes), is amended by adding Sections 4.07,
3515	3515	4.08, and 4.09 to read as follows:
3516	3516	Sec. 4.07. NATIONAL LEADERSHIP IN EQUINE PURSES. (a) In
3517	3517	this section:
3518	3518	(1) "Equine industry development fund" means a fund
3519	3519	dedicated to any nonpurse expenditures that support or promote the
3520	3520	industry of breeding, training, racing, riding, and competing with
3521	3521	horses in this state.
3522	3522	(2) "Equine racing purse trust fund" means the trust
3523	3523	fund established by Subsection (b) of this section.
3524	3524	(3) "Optimal Texas purse amount" means the annual
3525	3525	amount of purse money determined by the comptroller under
3526	3526	Subsection (d) of this section.
3527	3527	(4) "Target balance" means the amount of money needed
3528	3528	in total purse funds for a particular calendar month that will be
3529	3529	sufficient to aggregate, when combined with all other monthly
3530	3530	target balances for the calendar year, to the optimal Texas purse
3531	3531	amount for that calendar year.
3532	3532	(5) "Total purse funds" means the sum of the
3533	3533	unallocated cash balance of pari-mutuel purse funds and the
3534	3534	unallocated cash balance of the equine racing purse trust fund.
3535	3535	(b) The equine racing purse trust fund is established
3536	3536	outside the state treasury and is held in trust by the comptroller
3537	3537	for administration of this Act. Money in the trust fund may be
3538	3538	disbursed by the comptroller without appropriation as directed by
3539	3539	the commission to carry out this Act.
3540	3540	(c) Each pari-mutuel license holder authorized to operate
3541	3541	slot machines under Chapter 2022, Occupations Code, shall remit 15
3542	3542	percent of the gross gaming revenues from the license holder's slot
3543	3543	machines to the equine racing purse trust fund. Payments made
3544	3544	pursuant to this subsection shall occur as directed by the
3545	3545	commission but not less than twice per month. If a person makes a
3546	3546	payment under this subsection more than two days after the deadline
3547	3547	set by the commission, the person shall pay a penalty at the rate of
3548	3548	25 percent of the amount due per day for each day after the deadline
3549	3549	until the payment is received.
3550	3550	(d) The commission shall determine the optimal Texas purse
3551	3551	amount in accordance with this section. The commission shall
3552	3552	determine the annual total purse amount for all thoroughbred races
3553	3553	in each of the three states that allow pari-mutuel racing, other
3554	3554	than Texas, with the highest annual total purse amounts. In
3555	3555	evaluating the purse amounts of other states, the commission shall
3556	3556	include all breed development programs and all other supplemental
3557	3557	purse payments. In determining the amounts of thoroughbred purses
3558	3558	in other states, the commission shall use special care not to omit,
3559	3559	undervalue, or unnecessarily discount any portion of the purse
3560	3560	funds in those states. To calculate the optimal Texas purse amount,
3561	3561	the commission shall take the average of the annual total purse
3562	3562	amounts for the three states and multiply that amount by 1.05. The
3563	3563	commission shall update the optimal Texas purse amount at least
3564	3564	quarterly. The commission shall publish the list of the three
3565	3565	states used to determine the optimal Texas purse amount, the total
3566	3566	purse amounts for each of those states, and the optimal Texas purse
3567	3567	amount.
3568	3568	(e) Based on the current projected optimal Texas purse
3569	3569	amount, the commission shall establish a target balance of total
3570	3570	purse funds for each calendar month. The target balance shall vary
3571	3571	from month to month in order to fully support the seasonal nature of
3572	3572	horse racing.
3573	3573	Sec. 4.08. DEDUCTIONS FROM SLOT MACHINE INCOME AT GREYHOUND
3574	3574	RACETRACKS. (a) The greyhound racing purse trust fund is
3575	3575	established outside the state treasury and is held in trust by the
3576	3576	comptroller for the administration of this Act. Money in the trust
3577	3577	fund may be disbursed by the comptroller without appropriation as
3578	3578	directed by the commission to carry out this Act.
3579	3579	(b) A pari-mutuel license holder that owns or operates a
3580	3580	greyhound racetrack at which slot machine games are conducted under
3581	3581	Chapter 2022, Occupations Code, shall allocate 15 percent of the
3582	3582	net slot income generated from the operation of slot machines at the
3583	3583	slot establishment at the racetrack to purses.
3584	3584	(c) A state breed registry that receives a disbursement
3585	3585	under this section may allocate up to 50 percent of the amount
3586	3586	received for Texas breeder awards.
3587	3587	Sec. 4.09. ADMINISTRATION OF SLOT MACHINE ALLOCATIONS FOR
3588	3588	PURSES. The comptroller and commission shall jointly adopt rules
3589	3589	to administer Sections 4.07 and 4.08 of this Act. A matter
3590	3590	considered by the comptroller or commission under either section is
3591	3591	a contested case under Chapter 2001, Government Code, and requires
3592	3592	a public hearing.
3593	3593	SECTION 3. Section 47.02(c), Penal Code, is amended to read
3594	3594	as follows:
3595	3595	(c) It is a defense to prosecution under this section that
3596	3596	the actor reasonably believed that the conduct:
3597	3597	(1) was permitted under Chapter 2001, Occupations
3598	3598	Code;
3599	3599	(2) was permitted under Chapter 2002, Occupations
3600	3600	Code;
3601	3601	(3) consisted entirely of participation in the state
3602	3602	lottery authorized by the State Lottery Act (Chapter 466,
3603	3603	Government Code);
3604	3604	(4) was permitted under the Texas Racing Act (Article
3605	3605	179e, Vernon's Texas Civil Statutes); [or]
3606	3606	(5) consisted entirely of participation in a drawing
3607	3607	for the opportunity to participate in a hunting, fishing, or other
3608	3608	recreational event conducted by the Parks and Wildlife Department;
3609	3609	or
3610	3610	(6) consisted entirely of participation in authorized
3611	3611	games in a casino or slot establishment licensed or authorized
3612	3612	under Chapter 2022 or 2023, Occupations Code.
3613	3613	SECTION 4. Section 47.06(f), Penal Code, is amended to read
3614	3614	as follows:
3615	3615	(f) It is a defense to prosecution under Subsection (a) or
3616	3616	(c) that the person owned, manufactured, transferred, or possessed
3617	3617	the gambling device, equipment, or paraphernalia for the sole
3618	3618	purpose of shipping it:
3619	3619	(1) to a casino or slot establishment licensed or
3620	3620	authorized under Chapter 2022 or 2023, Occupations Code, for
3621	3621	gaming; or
3622	3622	(2) to another jurisdiction where the possession or
3623	3623	use of the device, equipment, or paraphernalia was legal.
3624	3624	SECTION 5. Section 47.09(a), Penal Code, is amended to read
3625	3625	as follows:
3626	3626	(a) It is a defense to prosecution under this chapter that
3627	3627	the conduct:
3628	3628	(1) was authorized under:
3629	3629	(A) Chapter 2001, Occupations Code;
3630	3630	(B) Chapter 2002, Occupations Code; [or]
3631	3631	(C) the Texas Racing Act (Article 179e, Vernon's
3632	3632	Texas Civil Statutes);
3633	3633	(D) Chapter 2022, Occupations Code; or
3634	3634	(E) Chapter 2023, Occupations Code;
3635	3635	(2) consisted entirely of participation in the state
3636	3636	lottery authorized by Chapter 466, Government Code; or
3637	3637	(3) was a necessary incident to the operation of the
3638	3638	state lottery and was directly or indirectly authorized by:
3639	3639	(A) Chapter 466, Government Code;
3640	3640	(B) the lottery division of the Texas Lottery
3641	3641	Commission;
3642	3642	(C) the Texas Lottery Commission; or
3643	3643	(D) the director of the lottery division of the
3644	3644	Texas Lottery Commission.
3645	3645	SECTION 6. Subchapter H, Chapter 151, Tax Code, is amended
3646	3646	by adding Section 151.356 to read as follows:
3647	3647	Sec. 151.356. GAMING DEVICES. The sale or use of a gaming
3648	3648	device permitted under Chapter 2022 or 2023, Occupations Code, is
3649	3649	exempt from the tax imposed by this chapter and from the other
3650	3650	provisions of this chapter.
3651	3651	SECTION 7. Sections 1.03(3) and (5), Texas Racing Act
3652	3652	(Article 179e, Vernon's Texas Civil Statutes), are amended to read
3653	3653	as follows:
3654	3654	(3) "Commission" means the Texas Gaming [Racing]
3655	3655	Commission.
3656	3656	(5) "Executive secretary" means the executive
3657	3657	director [secretary] of the Texas Gaming [Racing] Commission.
3658	3658	SECTION 8. The heading to Article 2, Texas Racing Act
3659	3659	(Article 179e, Vernon's Texas Civil Statutes), is amended to read
3660	3660	as follows:
3661	3661	ARTICLE 2. ADMINISTRATION BY TEXAS GAMING [RACING] COMMISSION
3662	3662	SECTION 9. Section 3.09(b), Texas Racing Act (Article 179e,
3663	3663	Vernon's Texas Civil Statutes), is amended to read as follows:
3664	3664	(b) The commission shall deposit the money it collects under
3665	3665	this Act in the State Treasury to the credit of a special fund to be
3666	3666	known as the Texas Racing [Commission] fund. The Texas Racing
3667	3667	[Commission] fund may be appropriated only for the administration
3668	3668	and enforcement of this Act. Any unappropriated money remaining in
3669	3669	that special fund at the close of each fiscal biennium shall be
3670	3670	transferred to the General Revenue Fund and may be appropriated for
3671	3671	any legal purpose. The legislature may also appropriate money from
3672	3672	the General Revenue Fund for the administration and enforcement of
3673	3673	this Act. Any amount of general revenue appropriated for the
3674	3674	administration and enforcement of this Act in excess of the
3675	3675	cumulative amount deposited in the Texas Racing [Commission] fund
3676	3676	shall be reimbursed from the Texas Racing [Commission] fund not
3677	3677	later than one year after the date on which the general revenue
3678	3678	funds are appropriated, with 12 percent interest per year until
3679	3679	August 31, 1993, and 6-3/4 percent interest thereafter with all
3680	3680	payments first attributable to interest.
3681	3681	SECTION 10. The following laws are repealed:
3682	3682	(1) Sections 2.01, 2.02, 2.03, 2.04, and 2.05, Texas
3683	3683	Racing Act (Article 179e, Vernon's Texas Civil Statutes);
3684	3684	(2) Sections 2.073, 2.074, 2.08, 2.09, 2.10, and 2.11,
3685	3685	Texas Racing Act (Article 179e, Vernon's Texas Civil Statutes); and
3686	3686	(3) Sections 6.093(a) and 18.01(a), Texas Racing Act
3687	3687	(Article 179e, Vernon's Texas Civil Statutes).
3688	3688	SECTION 11. (a) All funds in the Texas casino and slot
3689	3689	gaming fund are appropriated to the Texas Gaming Commission for the
3690	3690	operation of the commission and the administration of Subtitle A-1,
3691	3691	Title 13, Occupations Code, as added by this Act, for the biennium
3692	3692	ending August 31, 2011.
3693	3693	(b) Not later than January 1, 2010, the initial members of
3694	3694	the Texas Gaming Commission shall be appointed in accordance with
3695	3695	Chapter 2021, Occupations Code, as added by this Act. In making the
3696	3696	initial appointments, the governor shall designate one member to a
3697	3697	term expiring February 1, 2012, two members to terms expiring
3698	3698	February 1, 2014, and two members to terms expiring February 1,
3699	3699	2016.
3700	3700	(c) On September 1, 2010, or an earlier date specified in
3701	3701	the transition plan required under Section 13 of this Act, all
3702	3702	powers, duties, functions, programs, and activities related to
3703	3703	administrative support services, such as strategic planning and
3704	3704	evaluation, audit, legal, human resources, information resources,
3705	3705	accounting, purchasing, financial management, and contract
3706	3706	management services, of a state agency or entity abolished by
3707	3707	Section 16 of this Act are transferred to the Texas Gaming
3708	3708	Commission.
3709	3709	(d) On the date specified by Subsection (c) of this section
3710	3710	for the transfer described by that subsection:
3711	3711	(1) all obligations and contracts of a state agency or
3712	3712	entity that are related to a power, duty, function, program, or
3713	3713	activity transferred from the agency or entity under Subsection (c)
3714	3714	of this section are transferred to the Texas Gaming Commission;
3715	3715	(2) all property and records in the custody of a state
3716	3716	agency or entity that are related to a power, duty, function,
3717	3717	program, or activity transferred from the agency or entity under
3718	3718	Subsection (c) of this section and all funds appropriated by the
3719	3719	legislature for the power, duty, function, program, or activity
3720	3720	shall be transferred to the Texas Gaming Commission; and
3721	3721	(3) all complaints, investigations, or contested
3722	3722	cases that are pending before a state agency or entity or the
3723	3723	governing body of the agency or entity and that are related to a
3724	3724	power, duty, function, program, or activity transferred from the
3725	3725	agency or entity under Subsection (c) of this section are
3726	3726	transferred without change in status to the Texas Gaming
3727	3727	Commission.
3728	3728	(e) A rule or form adopted by a state agency or entity that
3729	3729	relates to a power, duty, function, program, or activity
3730	3730	transferred from the agency or entity under Subsection (c) of this
3731	3731	section is a rule or form of the Texas Gaming Commission and remains
3732	3732	in effect until altered by the commission.
3733	3733	(f) A reference in law to a state agency or entity abolished
3734	3734	by Section 16 of this Act, or to the governing body of the agency or
3735	3735	entity, that relates to a power, duty, function, program, or
3736	3736	activity transferred under Subsection (c) of this section means the
3737	3737	Texas Gaming Commission.
3738	3738	(g) A license, permit, or certification in effect that was
3739	3739	issued by a state agency or entity abolished by Section 16 of this
3740	3740	Act and that relates to a power, duty, function, program, or
3741	3741	activity transferred under Subsection (c) of this section is
3742	3742	continued in effect as a license, permit, or certification of the
3743	3743	Texas Gaming Commission.
3744	3744	SECTION 12. (a) The Texas Gaming Commission Transition
3745	3745	Legislative Oversight Committee is created to facilitate the
3746	3746	transfer of powers, duties, functions, programs, and activities
3747	3747	between the agency abolished by Section 16 of this Act and the Texas
3748	3748	Gaming Commission as provided by this Act with a minimal negative
3749	3749	effect on the operation of those regulated activities in this
3750	3750	state.
3751	3751	(b) The committee is composed of seven members as follows:
3752	3752	(1) two members of the senate, appointed by the
3753	3753	lieutenant governor not later than December 1, 2009;
3754	3754	(2) two members of the house of representatives,
3755	3755	appointed by the speaker of the house of representatives not later
3756	3756	than December 1, 2009; and
3757	3757	(3) three members of the public, appointed by the
3758	3758	governor not later than December 1, 2009.
3759	3759	(c) Once the other members of the committee have been
3760	3760	appointed, the executive director of the Texas Gaming Commission
3761	3761	serves as an ex officio member of the committee.
3762	3762	(d) A member of the committee serves at the pleasure of the
3763	3763	appointing official.
3764	3764	(e) The lieutenant governor and the speaker of the house of
3765	3765	representatives shall alternate designating a presiding officer
3766	3766	from among their respective appointments. The speaker of the house
3767	3767	of representatives shall make the first appointment after the
3768	3768	effective date of this section.
3769	3769	(f) A member of the committee may not receive compensation
3770	3770	for serving on the committee but is entitled to reimbursement for
3771	3771	travel expenses incurred by the member while conducting the
3772	3772	business of the committee as provided by the General Appropriations
3773	3773	Act.
3774	3774	(g) The committee shall:
3775	3775	(1) facilitate the transfer of powers, duties,
3776	3776	functions, programs, and activities between the agencies abolished
3777	3777	by Section 16 of this Act and the Texas Gaming Commission as
3778	3778	provided by this Act with a minimal negative effect on the gaming
3779	3779	activities regulated in this state;
3780	3780	(2) with assistance from the Texas Gaming Commission
3781	3781	and the agency abolished by Section 16 of this Act, advise the
3782	3782	executive commissioner of the Texas Gaming Commission concerning:
3783	3783	(A) the powers, duties, functions, programs, and
3784	3784	activities transferred under this Act and the funds and obligations
3785	3785	that are related to the powers, duties, functions, programs, or
3786	3786	activities; and
3787	3787	(B) the transfer of the powers, duties,
3788	3788	functions, programs, activities, records, property, funds,
3789	3789	obligations, and employees by the entities as required by Section
3790	3790	11 of this Act;
3791	3791	(3) meet at the call of the presiding officer;
3792	3792	(4) research, take public testimony, and issue reports
3793	3793	on other appropriate issues or specific issues requested by the
3794	3794	lieutenant governor, speaker, or governor; and
3795	3795	(5) review specific recommendations for legislation
3796	3796	proposed by the Texas Gaming Commission or the other agencies.
3797	3797	(h) The committee may request reports and other information
3798	3798	from the Texas Gaming Commission, other state agencies, and the
3799	3799	attorney general relating to gaming in this state and other
3800	3800	appropriate issues.
3801	3801	(i) The committee shall use existing staff of the senate,
3802	3802	the house of representatives, and the Texas Legislative Council to
3803	3803	assist the committee in performing its duties under this section.
3804	3804	(j) Chapter 551, Government Code, applies to the committee.
3805	3805	(k) The committee shall report to the governor, lieutenant
3806	3806	governor, and speaker of the house of representatives not later
3807	3807	than November 15 of each even-numbered year. The report must
3808	3808	include:
3809	3809	(1) identification of significant issues within
3810	3810	gaming regulation, with recommendations for action;
3811	3811	(2) an analysis of the effectiveness and efficiency of
3812	3812	gaming regulation, with recommendations for any necessary
3813	3813	research; and
3814	3814	(3) recommendations for legislative action.
3815	3815	SECTION 13. (a) The transfer of powers, duties, functions,
3816	3816	programs, and activities under Section 11 of this Act to the Texas
3817	3817	Gaming Commission must be accomplished in accordance with a
3818	3818	schedule included in a transition plan developed by the executive
3819	3819	commissioner of the Texas Gaming Commission and submitted to the
3820	3820	governor and the Legislative Budget Board not later than September
3821	3821	1, 2010. The executive commissioner shall provide to the governor
3822	3822	and the Legislative Budget Board transition plan status reports and
3823	3823	updates on at least a quarterly basis following submission of the
3824	3824	initial transition plan. The transition plan must be made
3825	3825	available to the public.
3826	3826	(b) Not later than March 1, 2010, the Texas Gaming
3827	3827	Commission shall hold a public hearing and accept public comment
3828	3828	regarding the transition plan required to be developed by the
3829	3829	executive commissioner of the Texas Gaming Commission under this
3830	3830	section.
3831	3831	(c) In developing the transition plan, the executive
3832	3832	commissioner of the Texas Gaming Commission shall hold public
3833	3833	hearings in various geographic areas in this state before
3834	3834	submitting the plan to the governor and the Legislative Budget
3835	3835	Board as required by this section.
3836	3836	SECTION 14. An action brought or proceeding commenced
3837	3837	before the date of a transfer prescribed by this Act in accordance
3838	3838	with the transition plan required under Section 13 of this Act,
3839	3839	including a contested case or a remand of an action or proceeding by
3840	3840	a reviewing court, is governed by the laws and rules applicable to
3841	3841	the action or proceeding before the transfer.
3842	3842	SECTION 15. (a) The Texas Gaming Commission shall
3843	3843	implement the powers, duties, functions, programs, and activities
3844	3844	assigned to the commission under this Act in accordance with a work
3845	3845	plan designed by the commission to ensure that the transfer of
3846	3846	gaming regulation under this Act is accomplished in a careful and
3847	3847	deliberative manner.
3848	3848	(b) A work plan designed by the commission under this
3849	3849	section must include the following phases:
3850	3850	(1) a planning phase, during which the commission will
3851	3851	focus on and stabilize the organization of the agency's powers,
3852	3852	duties, functions, programs, and activities, and which must
3853	3853	include:
3854	3854	(A) initiation of recommendations made by the
3855	3855	Texas Gaming Commission Transition Legislative Oversight
3856	3856	Committee;
3857	3857	(B) creation of interagency and intra-agency
3858	3858	steering committees;
3859	3859	(C) development of global visions, goals, and
3860	3860	organizational strategies; and
3861	3861	(D) development of communications and risk
3862	3862	management plans;
3863	3863	(2) an integration phase, during which the commission
3864	3864	will identify opportunities and problems and design customized
3865	3865	solutions for those problems, and which must include:
3866	3866	(A) identification of key issues related to costs
3867	3867	or legal requirements for other commission activities;
3868	3868	(B) planning for daily operations; and
3869	3869	(C) validation of fiscal and program synergies;
3870	3870	(3) an optimization phase, during which the commission
3871	3871	will complete and expand on the initial transitions, and which must
3872	3872	include:
3873	3873	(A) optimization of initial implementation
3874	3874	initiatives;
3875	3875	(B) use of enterprise teaming operations;
3876	3876	(C) building infrastructures to support and
3877	3877	facilitate changes in gaming regulation and oversight; and
3878	3878	(D) identification and use of beneficial assets
3879	3879	management and facilities approaches; and
3880	3880	(4) a transformation phase, during which the
3881	3881	commission will continue implementing initial and additional
3882	3882	changes in gaming regulation and oversight, and which must include
3883	3883	implementation of changes in agency management activities.
3884	3884	SECTION 16. (a) The Texas Racing Commission is abolished on
3885	3885	the date on which the powers, duties, functions, programs, and
3886	3886	activities are transferred under Section 11 of this Act, and after
3887	3887	that date a reference in any law to the Texas Racing Commission
3888	3888	means the Texas Gaming Commission.
3889	3889	(b) The abolition of a state agency or entity under
3890	3890	Subsection (a) of this section and the transfer of its powers,
3891	3891	duties, functions, programs, activities, obligations, rights,
3892	3892	contracts, records, property, funds, and employees as provided by
3893	3893	this Act do not affect or impair an act done, any obligation, right,
3894	3894	order, permit, certificate, rule, criterion, standard, or
3895	3895	requirement existing, or any penalty accrued under former law, and
3896	3896	that law remains in effect for any action concerning those matters.
3897	3897	SECTION 17. As soon as practicable after the constitutional
3898	3898	amendment to authorize casino gaming and slot machine gaming in
3899	3899	this state proposed by the 81st Legislature, Regular Session, 2009,
3900	3900	is approved by the voters and becomes effective, the Texas Gaming
3901	3901	Commission shall adopt the rules necessary to implement that gaming
3902	3902	in accordance with Chapter 2022, Occupations Code, as added by this
3903	3903	Act.
3904	3904	SECTION 18. (a) Sections 7 through 10 of this Act take
3905	3905	effect on the date the Texas Racing Commission is abolished under
3906	3906	Section 16 of this Act.
3907	3907	(b) Sections 1 through 6 and 11 through 17 of this Act and
3908	3908	this section take effect on the date the amendment adding Section
3909	3909	47-a, Article III, Texas Constitution, authorizing and regulating
3910	3910	slot machines and casino games by licensed operators and certain
3911	3911	Indian tribes to provide additional money to fund transportation in
3912	3912	this state and to provide additional financial aid for higher
3913	3913	education students proposed by the 81st Legislature, Regular
3914	3914	Session, 2009, becomes effective. If that amendment is not
3915	3915	approved by the voters, this Act has no effect.